Microsoft and Google Cloud Surge as AI Spending Climbs

On October 28, 2026, Microsoft and Alphabet both reported quarterly results, and cloud was the headline for each. Fortune reports that Microsoft's revenue was $92.3 billion, up 19% from a year earlier, with Azure growing 48%. For Alphabet, 9to5Google reports revenue of $127.6 billion, up 25%, and Google Cloud revenue of $30.71 billion, compared with $15.16 billion a year earlier.

Alphabet CEO Sundar Pichai said, per 9to5Google: "Google Cloud revenues grew 103%, powered by huge demand for our AI infrastructure and AI solutions." Fortune adds that the cloud unit's profit margin widened to 36.2%, and that Cloud's annual run rate is now over $70 billion.

The spending is large. Fortune reports that Alphabet's quarterly capital expenditure reached a record $51.4 billion, up from $24 billion a year earlier, and that free cash flow was negative $9.1 billion. Microsoft's quarterly capital expenditure was $45.2 billion, according to Fortune and The Motley Fool. Fortune notes that this was higher than the prior quarter but below what analysts had predicted. Fortune also reports that Alphabet's shares fell in after-hours trading while Microsoft's rose.

These are reported company results, and they show where the money is going: data centers, chips and the AI services that run on them. Both companies are betting that business demand for AI will keep growing fast enough to justify the cost. For customers, that demand also means capacity can be tight and prices and contract terms can change.

What this means for businesses: if you run on Azure, Google Cloud or another major cloud, review your contracts and usage now. Ask your provider about capacity commitments, price changes and where your AI workloads will run. Track your own cloud bill by team or project so growth does not surprise you. Before adopting a new AI service, run a small pilot with a clear goal and a spending cap, and keep your data in formats you can move if you ever need to switch.