Today I had a lot of iCloud Drive connectivity issues on my Mac, but Apple’s system status page showed no service issues. Eventually I discovered that Little Snitch was blocking a cloudd connection to gcs-eu-00002.content-storage-download.googleapis.com…
I seem to recall that Apple started buying storage from AWS and Microsoft, and later dropped MS for Google.
As @cornchip mentioned Apple is Google’s largest commercial customer, and is known internally at Google as Bigfoot. In 2021 it was reported that Apple had 8 million TB of data stored in Google Cloud.
I suspect cost is the main reason Apple has never/may never given iPhone users more than 5GB of free storage.