Not AI, but the cloud is the pot of gold for big tech companies | Tech

The AI ​​chatbot ChatGPT from Microsoft and OpenAI has been in the spotlight for over a year. All major tech companies are fully committed to the development of artificial intelligence. But that is not where they currently make money, according to the quarterly figures of Microsoft, Google parent company Alphabet and Facebook parent company Meta.

Microsoft and Google are increasingly generating revenue from their cloud services. This is because we increasingly store photos and files online with cloud services such as OneDrive (from Microsoft) and Google Drive.

But companies are also increasingly using cloud services. In addition to files, they also move their software and sometimes even their entire working environment to the cloud.

As a result, cloud environments have become a billion-dollar business for major tech companies. Microsoft earned almost 25 billion euros in the first three months of this year. Google earned almost 9 billion euros from its cloud services in the past quarter.

For Microsoft, the cloud division is already the most important source of income. Cloud services are responsible for more than 43 percent of the company’s total turnover: 57.6 billion euros.

At Google, its search engine is still the largest revenue generator. The search giant achieved a turnover of more than 75 billion euros in the past three months. Half of that comes from its search engine.

But the cloud division is also becoming increasingly important for Google. The search giant already generates almost 12 percent of its turnover from cloud services. That turnover grew by more than 28 percent in the past year, the highest growth rate of all Google divisions.

Facebook parent company Meta does not have cloud services. That company is mainly dependent on advertising revenue. There is also considerable growth. Meta’s total turnover increased by more than 27 percent compared to the first three months of 2023, to almost 34 billion euros.

The three tech companies have very high expectations of artificial intelligence. For example, Microsoft has already invested more than 12 billion euros in OpenAI, the company behind ChatGPT.

But the revenues from AI services are not yet reflected in the quarterly figures of the three tech giants. Google parent company Alphabet, for example, hides them in the ‘other bets’ category. That is a collection of all kinds of test projects from Google.

The ‘other bets’ category recorded a turnover growth of more than 71 percent in the past quarter and generated more than 461 million euros for the company. But compared to the total turnover of the search giant (over 75 billion euros), this is only a piece of cake.

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Meta, Alphabet and Microsoft ended the first quarter of this year with billions in profits. Facebook’s parent company ended up with 11.5 billion euros left over, more than doubling compared to the first three months of last year.

At Microsoft, profit increased by almost 20 percent compared to last year, to 20.4 billion euros. Google’s parent company saw its profits increase by more than 57 percent and wrote 22 billion euros in profit in the books.

In addition to Google and Microsoft, Amazon is also a major cloud provider. That company will release its quarterly figures next week.

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