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Alphabet's Google Cloud posted 63% year-over-year revenue growth in the first quarter and expanded operating margin from 18% to 33%, while Microsoft's Azure grew 40% year over year. Microsoft's AI business unit, which includes Copilot integration across its productivity software, generated $37 billion（約5.9兆円） in annual revenue and is growing at 123%.
Why it matters
Cloud computing has emerged as a durable business model over the past decade, and AI workloads are now the primary driver of that growth. Google Cloud benefits from its Tensor Processing Unit (TPU), a custom AI chip offering better cost-performance than GPU-based alternatives, which the company is now selling to external clients. Microsoft's neutral approach—supporting multiple AI models on Azure rather than favoring one—appeals to customers uncertain which model to adopt, while its 27% stake in OpenAI gives it a financial interest in ChatGPT adoption.
What to watch
Microsoft's stock is down 30% from its highs, which the author views as a buying opportunity given the durability of cloud workloads. Both companies are benefiting from a subscription-like model where AI applications will need to run on their cloud infrastructure long-term.
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