AWS, Microsoft, Google, Oracle Daily CapEx Spending Hits $1 Billion!

In today's Cloud Wars Minute, I look at how the four hyperscalers
are now spending a billion dollars every day on CapEx to keep up
with explosive AI demand.


Highlights


00:19 — The four hyperscalers — AWS, Microsoft,
Google, and Oracle — are now spending, as of Q2, a combined
billion dollars a day on CapEx to try to keep up with explosive
AI demand. Here's where these numbers come from. And I will say
here, I'm calling it Q2, but Oracle's quarter ended May 31.


01:00 — But these are very close for the four
CapEx spending numbers for the four hyperscalers: AWS, $31.6
billion; Microsoft, about $27 billion. Google Cloud, $22.4
billion. Oracle, $9.1 billion — far more than Oracle has ever
spent before. That's a total of $90.1 billion. We had 91 days in
the quarter. So yeah, I cheated a little. It's actually $990.1
million per day. But I got a little crazy.


02:02 — Andy Jassy, the CEO of Amazon said, “You
know, this is a new industry. It's pretty crazy. You know, we've
built at AWS a $123 billion annualized run rate business, and
we're still in the early days.” All of the business leaders are
realizing that to be able to compete going forward, they're going
to have to turn their businesses into AI-powered enterprises.


03:20 — They don't see this as a one-time
seasonal boom that will go back down. They all say, “We think
we're going to be spending at these rates going forward.” Oracle
CEO Safra Catz, reflecting on the $9 billion that Oracle spent in
its quarter ended May 31, said for the coming year, “We are
expecting to spend more than $25 billion in CapEx — way more than
ever before.”


04:05 — CFO Amy Hood gently guided the
questioner through this, saying, “That is a lot of money, there's
no question about it. But our RPO, or remaining performance
obligation — we have future commitments at Microsoft Cloud for
$368 billion in customer contracts, and we don't currently have
enough capacity to meet that. It's going to continue to go up.”


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