Nvidia<\/a>‘s semiconductors, directly to some customers.<\/p>\n“It is capturing new workloads for the most part – sometimes from companies new to cloud, often additional workloads from customers of other clouds who want to be less dependent on a \u200bsingle \u200bcloud provider or who like Google data, analytics and AI offerings,” said Lee Sustar, principal analyst at Forrester.<\/p>\n
Story Continues <\/p>\n
Pichai \u200bsaid cloud growth could have been higher were it not for the \u200cindustry-wide capacity constraints on computing power that have sparked Big Tech’s spending spree.<\/p>\n
To overcome those shortages, the company bumped its annual capital spending forecast by $5 billion to between $180 billion and $190 billion and said it was planning another significant increase in 2027.<\/p>\n
“The risk of sitting it out is bigger than the risk of leaning in,” said Daniel Newman, CEO of tech research firm Futurum Group, referring to the large AI bills.\u00a0“Every hyperscaler (large cloud company) understands that under-investing in this cycle is an extinction-level risk.”<\/p>\n
Alphabet’s rising expenses will bring it closer to Amazon, which stuck with its $200 billion annual spending projection. That somewhat reassured investors who had dumped its stock in January when the forecast was first released.<\/p>\n
Back-to-back deals deepening Amazon’s tie-ups with OpenAI and Anthropic have also lifted shareholder confidence. \u200cThe company’s shares are up roughly 14% this year, as of last close, among the best performers in \u200bthe “Magnificent Seven” group of tech mega-caps.<\/p>\n
MICROSOFT CLOUD, OUTLAY FORECASTS EXCEED ESTIMATES<\/p>\n
After a modest growth pickup in Microsoft’s Azure cloud \u200bbusiness initially sent shares lower, the company reassured investors with a prediction that revenue \u200bthere would increase between 39% and 40%, in constant currency terms in its current quarter, better than expectations for 36.7% growth.<\/p>\n
But the expected revenue acceleration \u200cwould also come with a surge in spending: its capital outlay for \u200bcalendar 2026 is expected to total $190 billion. About $25 \u200bbillion of that spending is coming from rising costs of components such as chips.<\/p>\n
“Broad and growing customer demand continues to exceed supply,” CFO Amy Hood said of Azure’s AI business on a post-earnings call.<\/p>\n
Microsoft touted user gains for its Copilot AI assistant and said engagement levels for those using the tool equaled that of Outlook. Overall adoption of \u200bthe Copilot, however, has remained sluggish.<\/p>\n
“Customers are going to Google because its \u200cAI is seen as more accurate and trustworthy than Copilot and because its full-stack approach is likely to drive greater economies of scale,” said Rebecca Wettemann, CEO \u200bof Valoir, an industry analyst firm, referring to Google’s focus on every layer of the AI technology chain including chips, data centers, AI models and developer \u200btools.<\/p>\n
(Reporting by Aditya Soni and Deborah Sophia in Bengaluru; Editing by Sayantani Ghosh and Thomas Derpinghaus)<\/p>\n","protected":false},"excerpt":{"rendered":"By Aditya Soni and Deborah Mary Sophia April 30 (Reuters) – Alphabet’s blowout cloud growth has reset expectations…\n","protected":false},"author":2,"featured_media":22932,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[24,407,1483,321,132,1429,2194,3326,320,15844,15843,141,2066],"class_list":{"0":"post-22931","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-google","8":"tag-ai","9":"tag-ai-infrastructure","10":"tag-alphabet","11":"tag-amazon","12":"tag-google","13":"tag-google-ai","14":"tag-google-cloud","15":"tag-investors","16":"tag-microsoft","17":"tag-revenue-expectations","18":"tag-spending-spree","19":"tag-sundar-pichai","20":"tag-tech-companies"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/22931","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=22931"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/22931\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/22932"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=22931"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=22931"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=22931"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}