Tech giants’ investments in cloud infrastructure are reportedly paying off due to the demand for artificial intelligence.
The momentum of cloud businesses began to slow in early 2022 as companies completed their migration to the cloud, but it has now picked up because companies need the infrastructure for AI, The Wall Street Journal reported Friday (Nov. 1).
Microsoft Chief Financial Officer Amy Hood said the demand exceeds the company’s capacity, according to the report.
The cloud businesses of Microsoft, Amazon and Google earned combined revenues of $62.9 billion last quarter, up 22.2% from a year earlier, the report said.
At the same time, they told investors that they must continue to spend on property and equipment to build more data centers, per the report.
Google parent Alphabet, Amazon and Microsoft spent a combined $50.6 billion on this infrastructure in the last quarter, up from $30.5 billion a year ago, according to the report.
While some question whether the demand for AI will continue growing enough to justify those investments, the companies’ most recent quarterly results showed that the cloud business is going strong, the report said.
All three companies are building AI products, but it’s the infrastructure that is delivering profits in the near term, per the report.
Other tech giants are also pouring resources into AI infrastructure, PYMNTS reported Thursday (Oct. 31).
Meta plans to spend up to $40 billion on this infrastructure in 2024, and its AI efforts are already showing promising results in terms of user engagement and advertising effectiveness.
Chip maker AMD reported record-breaking third-quarter revenue largely fueled by surging demand for AI-focused products, with the company’s Data Center segment being the star performer.
It was reported in September that OpenAI plans to bring together global investors to spend tens of billions of dollars on AI infrastructure in the United States.
The planned projects include data centers, turbines and generators, and semiconductor manufacturing.
In another measure of the demands placed upon infrastructure by companies’ use of AI, Goldman Sachs estimated that there will be a 160% increase in data center power consumption by 2030.
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Job cuts in government, technology and retail led the way as U.S. employers announced the largest number of cuts in one month since May 2020.
Among the 275,240 job cuts announced in March, 216,215 were in government, 15,055 were in technology and 11,709 were in retail, Challenger, Gray & Christmas said in a report released Thursday (April 3).
“Job cut announcements were dominated last month by Department of Government Efficiency (DOGE) plans to eliminate positions in the federal government,” Andrew Challenger, senior vice president and workplace expert for Challenger, Gray & Christmas, said in the report. “It would have otherwise been a fairly quiet month for layoffs.”
The total number of job cuts made in March was more than three times the 90,309 cuts announced in March 2024, according to the report.
By sector, compared to March 2024, government job cuts were almost six times higher, technology cuts were about 6% higher and retail cuts were nearly twice as high, per the report.
All the government job cuts made in March occurred in the federal government, the report said.
The top reason employers gave for cutting jobs in March was “DOGE impact,” which was cited for 216,670 of the month’s cuts, according to the report.
Other common reasons included store, unit or department closing, to which 17,666 job cuts were attributed, and market/economic conditions, which accounted for 11,594 cuts, per the report.
Challenger, Gray & Christmas also said in the report that employers are planning to hire fewer workers than they were a year ago. Companies’ hiring plans dropped by about 37%, from 21,102 in March 2024 to 13,198 in March 2025, according to the report.
The specter of uncertain job security may accelerate a spending pullback that is already in motion, PYMNTS reported Wednesday (April 2). Consumer confidence that was already shaken may have been further impacted by the Bureau of Labor Statistics’ latest snapshot of the labor market released Tuesday (April 1), which found that the labor market slowed in February, with a decline in job openings over the past year.
The Conference Board reported March 25 that consumer confidence slipped for the fourth straight month in March, due in part to a plunge in consumers’ short-term outlook for income, business and labor market conditions.
