Alphabet, Microsoft Report AI Demand Surge

Alphabet and Microsoft reported increased demand for artificial intelligence during their quarterly earnings, highlighting the growing importance of AI in their business strategies.

Alphabet expects capital expenditures to rise sharply in 2027, following projected spending of between $195 billion and $205 billion this year.

Alphabet's third-quarter revenue reached $127.6 billion, a 25% increase from the previous year, while Microsoft's fiscal first-quarter revenue rose to $92.3 billion, up 19%.

Google Cloud revenue more than doubled to $30.7 billion, a 103% increase from the prior year, while Microsoft's Azure cloud business saw revenue growth of 48%.

Alphabet spent approximately $51.4 billion on capital expenditures during the third quarter, more than double the amount spent a year earlier, with much of the investment focused on technical infrastructure for AI and cloud services.

Alphabet CEO Sundar Pichai stated, 'Our AI infrastructure and solutions are the major drivers for Cloud growth, and our customers see us as the leading provider here, so there’s huge demand.'

Microsoft similarly highlighted strong demand for AI services, with its cloud revenue rising 30% to $63.9 billion.