The big question going into tech earnings this week was will that huge step up in capital spending on AI infrastructure pay off?

Well, we got to read into that from cloud providers, Amazon, Microsoft, and Google.

Dear Tervosa has more in today's tech check.

Hey, Dee.

Hey, good morning, Leslie.

So, yes, this week's trio of earnings reports from those hypers

does confirm AI as the next catalyst for growth and potentially a new order where Google

has the advantage. Take a look at this chart. Annual cloud revenue growth for all of them

was sliding going into 2023 as that broad enterprise migration to the crowd. It was decelerating. But at that time,

too, generative AI was just ramping up. Microsoft's Azure, that is the blue line. It was the,

of course, main early beneficiary. Its partnership with Open AI, its co-pilot AI tools,

largely seen as a leader in the space and therefore grew its top line

faster than its rivals.

But more recently, some of the air coming out of that trade.

In fact, that early advantage from its Open AI Association looked more like a burden this

past quarter.

CFO Amy Hood said the company will record a one and a half billion

dollar hit largely thanks to Open AI's expected loss. Remember, too, that part of its

investment in the startup, it was in the form of discounted cloud credits, potentially leading

to lower short-term income versus, you know, getting standard market rates from other customers.

And now, Cio Satya Nadeela said that cloud is facing capacity constraints.

Now, one of the most unexpected developments of the week, Google's strengthen cloud.

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