nvestors keep score with growth rates, but this quarter you had to read the footnotes and the fine print. Microsoft put up eye-popping Azure growth again, but a big slice of that acceleration is AI inference — notably ChatGPT — now embedded in the revised Azure definition - great for headlines but not conducive to apples-to-apples comparisons. Meanwhile, AWS delivered the largest dollars and a very clear message that demand exceeds supply. Meaning growth is capped by power and components, not pipeline. That creates a weird optics penalty — AWS showing growth in the high teens growth on a $120B-plus run rate and it’s a “concern.” But it also telegraphs future upside as capacity lands and depreciation cycles through.

The stealth story is Google. Google Cloud posted a strong print with solid top-line growth and steadily improving operating margin — and GCP (the IaaS/PaaS core) is growing materially faster than Cloud overall - our estimate is nearly 40%. Backlog is building at more than $250M and $1B+ deals are real. As the mix shifts toward AI-heavy, infrastructure-centric workloads, it becomes a tailwind for Google, continues to lag the scale of AWS and Azure. Let’s call it a disciplined scale strategy with less noise.

The other common thread is a capex arms race that faces real constraints. All three players said the quiet part out loud — power, sites, servers, power and lead times will dictate who wins AI inference and who monetizes it. Microsoft is capacity-constrained, AWS says “several quarters” to rebalance, and Google raised capex again. This is not a one-quarter story; it’s a multi-year land-and-power grab that will determine margin structures for the next cycle. Meanwhile, the Big three cloud players are on a pace to spend about $240B this year on CAPEX with AI revenue coming in at about 10% of that figure. We clearly have a big hurdle before that massive investment pays back.