Estrange contrast. While Google is keeping a low profile in Washington in an antitrust trial where it is struggling to demonstrate that its talent in research owes nothing to its fatness, it continues to grow bigger and bigger. For the third quarter of 2023 alone, it announced, Tuesday October 24, a turnover of 77 billion dollars (72.4 billion euros) and an operating profit of 21 billion dollars.
Opposite him, the sumo Microsoft is not to be outdone: 56.5 billion dollars in turnover between July and September, up 13%. He even found the martingale that could one day make him overtake his rival. This is what the Stock Exchange thinks, which looks ahead when justice looks behind. That same Tuesday evening, Microsoft’s valuation rose by $100 billion while that of Google fell by the same amount.
The reason for this sudden craze lies in two letters: AI. Artificial intelligence is the new obsession of investors because they are convinced, rightly, that it will be the main growth engine for technology companies in the years to come. And in this area, Microsoft has a head start. It is strong both in AI, thanks to its investment in OpenAI, the creator of ChatGPT, and in clouds, these large data centers which are used massively by these new intelligences.
A crucial battle
Its cloud division grew 29% this quarter after growing 27% in the previous three months. A jump attributed to users’ sudden enthusiasm for generative artificial intelligence. Much better than investors expected. Conversely, Google, with “only” 22% growth in this area, disappointed. In addition, the firm is smaller in the cloud market.
This battle in the clouds is crucial. This area alone accounts for almost 20% of all IT spending worldwide and the majority of its growth. According to Gartner, this colossal market is expected to exceed $1,000 billion worldwide by 2027 and three players hold more than two-thirds of it alone: Amazon, Microsoft and Google.
Since the economies of scale and capital requirements are considerable and it is very difficult for customers to change suppliers, the three giants of the West Coast have a boulevard in front of them. Justice, at its own pace, will take an interest in it in a few years.