If you are looking for cloud-based Active Directory as a replacement for on-premise domain controller, like Active Directory without on-premise domain controller, we have an Azure Active Directory is cloud-based identity and access management service hosted in Microsoft datacenter, If you are looking to get rid of physical Domain Controller then Virtual machine in Azure or AWS is an option and is fully supported however if you are looking to get away from running a Windows Server and all of the usual OS maintenance tasks, like patching, group policies, there is no cloud alternative available.
If you don’t have any on-premises server dependencies and are using all cloud services such as Exchange Online and Onedrive for all file storage, or Microsoft Office 365 solutions and just need basic Windows desktop management, Azure Active Directory and Intune and windows 10 and there wont be any servers or server OS to manage/support
So Windows 10 clients cannot directly communicate with an Azure AD, and Azure AD can’t used for user logon authentication, we can’t replace on-premise domain controller with cloud-based Active Directory
However we can join Windows 10 workstation computer to Azure AD Domain, as per Microsoft this is for the devices that access cloud services and not a recommended solution who need a fully functional desktop and Active Directory environment, more from MS on Windows 10 Domain Join
Why can’t use on-prem Domain Controller, VM can be used and it’s relatively lightweight, Local Domain Controller can be sync with Azure Active Directory
Domain Controller Can be moved to virtual machines in Azure
We have to set up a site-to-site Azure Virtual Network from your premises network to Azure, and migrate local Active Directory Domain Controllers and Active Directory Federation Services (ADFS) to virtual machines in Azure, should be planned well and you should have a good network connection between local network with MS Azure network to implement this
Also Read: Windows Server 2016 Features