Why do small and medium-sized companies use cloud servers, while large-scale Internet (companies in other industries) all use physical machines?

Because the cloud server is easy to purchase, low cost, and easy to maintain. (If there is a problem, submit a work order to the cloud service provider and they will solve it). And various application services can be purchased directly, such as LVS load balancing, mysql database service.
The physical machine must be hosted in the IDC (data center), commonly known as the computer room, which is expensive.
Example of hosting cost: One Unicom computer room, one computer room for one month hosting cost: 7K Beijing Yizhuang Unicom computer room cost of a cabinet
is cheaper in other places, generally 3K in the south