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- Google Cloud reached $20.03 billion in Q1 2026 — up 63% year-over-year — while Microsoft’s AI business topped an annual revenue run rate of $37 billion, up 123% year-over-year.
- Alphabet’s total revenue in the first quarter reached $109.9 billion, its fastest growth rate since 2022; Microsoft had revenue of $82.9 billion, up 18%.
- OpenAI has lost ground on its internal revenue and user goals in recent months, with CFO Sarah Friar warning that the company could struggle to fund future computing contracts.
Wednesday was a bad day to be governed by AI.
Both Microsoft and Alphabet, Google’s parent company, reported earnings after the bell, and both beat expectations — on the same day that OpenAI’s revenue stumbled. It still resonates Through the market. The message from the two biggest players in enterprise cloud was hard to miss: AI business is not slowing down. If anything, it’s accelerating.
Published alphabet $109.9 billion In first-quarter 2026 revenue, up 22% from a year ago and the company’s fastest growth rate since 2022. Wall Street was expecting about $107.1 billion. The headline number is Google Cloud, which brought in $20.03 billion — up 63% year over year from $12.26 billion in the first quarter of 2025, and nearly $1.6 billion above analyst estimates. CEO Sundar Pichai He said Enterprise AI solutions “became our primary growth driver in cloud for the first time in the first quarter.”
Microsoft wasn’t far behind. Company I mentioned Revenue of $82.9 billion for fiscal third quarter 2026, up 18% year over year, beating estimates of $81.39 billion. The real number that caught the eye: Its AI business surpassed $37 billion in annual revenue, up 123% from the previous year. Azure and other cloud services grew 40% year over year. Microsoft Cloud overall was valued at $54.5 billion, up 29%.
It’s all thanks to the magic of the AI boom.
Copilot, Microsoft’s AI assistant for enterprises, is now available exceeds 20 million paid users – up from 15 million just last quarter. CEO Satya Nadella called it “the era of agent computing,” which is the kind of phrase you make when your numbers back it up.
Gemini pulls his weight in all areas. Earlier this year, Apple I fell Multi-year deal to build the next generation of core models on Google’s Gemini, giving the search giant one of the biggest AI endorsements of 2026. Paid monthly active users for Gemini Enterprise grew 40% quarter-on-quarter. Hit Google’s cloud backlog $460 billion– Nearly double the previous quarter.
All of this falls against the backdrop of a bad week for OpenAI. Company It has missed its internal goals For both revenue and user growth, CFO Sarah Friar reportedly told company leaders that she was concerned that OpenAI might not be able to fund future computing contracts if revenues didn’t rise quickly enough.
The market response was rapid. CNBC Reports Oracle stock fell about 4%, CoreWeave stock fell more than 5%, and SoftBank stock – one of the largest investors in OpenAI – fell almost 10% during trading hours in Tokyo. Nvidia and AMD shares also fell.
The contradiction is difficult to ignore. While OpenAI relies on investors to absorb the gap between ambition and revenue, Google and Microsoft are printing money on the same AI wave. gemini 3 pro, Released In November 2025, it outperformed its predecessor in every benchmark tested by Google, and now leads commercial demand across the cloud stack.
On the advertising side, Google’s total advertising revenue was $77.25 billionup 15.5% year over year, beating estimates in this area as well. YouTube was the only weak spot with $9.88 billion versus expectations of $9.99 billion — a small loss in a clean sweep.
Alphabet has guided 2026 capex at $175 billion to $185 billion, up from $91.4 billion in 2025. The $460 billion cloud backlog may indicate the company expects those bets to continue turning into revenue through 2027.
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