In short
- Google Cloud hit $20.03 billion in Q1 2026—up 63% year over year—while Microsoft’s AI business surpassed $37 billion in annual revenue, up 123% year over year.
- Alphabet’s total Q1 revenue reached $109.9 billion, the fastest growing since 2022; Microsoft posted $82.9 billion in revenue, up 18%.
- OpenAI has missed its internal and user funding in recent months, with CFO Sarah Friar reportedly warning the company that it may struggle to secure funding for future contracts.
Wednesday was a bad day to be an AI destroyer.
Microsoft and Alphabet, Google’s parent company, both reported earnings after the bell, and both were expecting it — the same day OpenAI’s money stumbled. he repeats through the market. The message from the two biggest players in the enterprise cloud was hard to miss: AI sales are not slowing down. If anything, it speeds it up.
Sent letters $109.9 billion in Q1 2026 revenue, up 22% from a year ago and the company’s fastest rate of growth 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-on-year from $12.26 billion in Q1 2025, and about $1.6 billion above what analysts thought. CEO Sundar Photos he said business AI solutions became “our biggest cloud driver for the first time in Q1.”
Microsoft was not far behind. The company report $82.9 billion in its Q3 2026 revenue, up 18% year-on-year, over $81.39 billion. The real number that turned heads: Its AI business surpassed $37 billion in annual revenue, up 123% from last year. Azure and other cloud services grew 40% year over year. Microsoft Cloud as a whole hit $54.5 billion, up 29%.
All thanks to the magic of the AI boom.
Copilot, Microsoft’s AI assistant for the industry, now than 20 million paid users – up from 15 million last quarter. CEO Satya Nadella called it “the computing era,” which is the kind of phrase you say when your numbers are back.
Gemini is pulling its weight across the board. Earlier this year, Apple he signed multi-year agreement to build the next generation of Foundation Models on Google’s Gemini, giving the search giant one of the biggest AI projects of 2026. Monthly paid users of Gemini Enterprise grew 40% quarter over quarter. Google’s Cloud backlog has hit $460 billion– almost double the previous quarter.
All of this falls on the back of OpenAI’s bad week. The company he missed his inner goals on finances and user growth, CFO Sarah Friar is said to have told company leaders that they are concerned that OpenAI may not be able to pay for future contracts if funding is not done quickly.
The market response was swift. Price CNBC reports that Oracle fell about 4%, CoreWeave sank more than 5%, and SoftBank – one of the biggest OpenAI investors – fell about 10% during the trading session in Tokyo. Nvidia and AMD also slipped.
The contrast is hard to ignore. While OpenAI is leaning on investors to bridge the gap between ambition and investment, Google and Microsoft are printing money from the same AI wave. Gemini 3 Pro, release in November 2025, it surpassed the existing data on every benchmark that Google tested, and is now driving the demand for products across the Cloud stack.
On the advertising side, all of Google’s advertising revenue came in $77.25 billionrising by 15.5% year-on-year, surpassing the limits in this field as well. YouTube was one soft spot at $9.88 billion versus a forecast of $9.99 billion — a narrow miss in the clean sweep.
The letters guided by the big money for 2026 at $ 175 billion to $ 185 billion, from $ 91.4 billion in 2025. The $ 460 billion of Cloud backlog can say that the company expects the bets to continue to turn into money until 2027.
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