Instead of using 1 physical server split into chunks, cloud hosting uses multiple servers working together. Furthermore, it’s infinitely scalable simply by adding more physical servers to “The Cloud” building a bigger and bigger cloud.
A Virtual Private Server used to exist on just 1 physical server. Because cloud servers can now work together as 1 server, we can host a VPS on a cloud platform. It’s now a Virtual Private Server that can grow as big as you want without the physical hardware barriers.