Race for AI Future: Google, Oracle, Microsoft, AWS Try to Meet Insatiable Demand

**Bob Evans** (0:00)
Hello, my friends, and welcome back to Cloud Wars Minute. We are seeing the beginnings here of an incredible round of innovation, not just in technology, but in deal making, partnerships, alliances, financing, all by the hyperscalers trying to meet this insatiable AI demand. I wanted to mention a few of these different approaches, and also highlight how the old notion, what got us here won't get us there. We're seeing these companies undertake some very innovative, bold, distinctive new strategies to try to build the capability and the capacity to get these AI data centers built out to meet this insatiable demand. So very interesting combination of ways they're going at it. Google Cloud did a joint venture with Blackstone, in which Blackstone, one of the world's largest asset managers, invested $5 billion into the joint venture, specifically this joint venture's designed to help just put out more AI data center capacity. They want to have 500 megawatts added in 2027
We have seen Amazon over the last nine months issue a series of debt and bond offerings, totaling over $100 billion. Much of that going to fund AWS CapEx. AWS saying that in this calendar year, 2026, it will spend $200 billion on CapEx, most of which is going into AI data centers. You've got now Oracle early this year announced a combination of $50 billion in debt and equity financing. When Oracle disclosed that, a lot of people on Wall Street went crazy, said, oh, this is impossible. It shows that things are out of control. I don't think those people are aware that this funding, this raising of funds to be able to build out the data centers is because there's among these hyperscalers, over $2 trillion in committed, contracted business. In a detailed article, lots of details in it. Fascinating story that I'll have on cloudwars.com later today. I mentioned that while Oracle right now is the smallest by revenue of the hyperscalers, it has the largest backlog. And in order to meet that, it has to spend a lot of money to build the capacity for these data centers to go ahead and do this. But the payout is much bigger than this upfront investment.
$638 billion is the Oracle backlog total. Microsoft is using proceeds from its brilliant early relationship with OpenAI to help get some of the funding. So under a newly restructured agreement between the two companies, Microsoft now will receive 20% of OpenAI revenues for the next few years. Plus Microsoft has a huge ownership stake in OpenAI. So when this heralded OpenAI IPO actually happens, Microsoft is going to reap a huge reward from that, that they'll be able to use going forward. And then the final point I wanted to mention here was that Metta, parent company of Facebook, has said now it leaked, I'm sure this internal memo that they might have as they build their own data center capacity to fund and take care of their own internal services, said, hey, we might have some extra capacity, we might rent that out to enterprises. That's an interesting idea. I don't blame them at all for wanting to float this idea and get some attention, maybe get some prospects sniffing around there. But it's a long, long way from saying, hey, I've got some extra excess capacity, who wants to rent it to becoming a full-fledged hyperscaler with wildly sophisticated capabilities and offerings, security, and more that the four hyperscalers have. I mean, it's like me saying, hey, I got sneakers and a basketball, I'm an NBA player. I know there's a little bit of distance between here and there. So remarkable things going on here as the technology build-up by all these companies now has helped to create this incredible demand. And what we're seeing now is extraordinary efforts by the hyperscalers to combine with other companies, move into different industries and do everything possible at staggering expenses to meet this insatiable customer demand for AI. Wild times right now.
Thanks for being with us here at Cloud Wars Minute. I hope you have a fantastic day.