Cloud Wars: Google’s $75B Bet Against Microsoft and Amazon

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Cloud Wars:

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’s $75B Bet Against

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and

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As the internet moved away from individual websites to account-based access for platforms, few companies benefited as much as Alphabet (NASDAQ:),

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(NASDAQ:) and

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.com Inc (NASDAQ:). This transition created the foundational layer for user experience, an infrastructure that the “Big Three” monetized.

Consequently, their cloud services expanded and locked in users via ecosystem integration. Just the Big Three –

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(GCP),

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(Azure), and

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(AWS) – hold 63% of global cloud market share as of Q1 2025. And as they provide the bulk of the world’s services and data, they also serve as extensions of the US government. This is why it is so common to see the heads of these companies meeting with current presidents, and why public-private partnership (PPP) has become the norm.

The computational demands for AI services make the Big Three even more entrenched. But which company is most likely to scale the fastest, pleasing shareholders with the most growth?

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(GCP)

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Cloud Platform ranks the lowest of the Big Three, at only 12% global cloud market share. However, under the umbrella of Alphabet,

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has the most interlinked ecosystem. From Android to

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and Gmail, to productivity tools integrated into

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Drive,

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offers full cross-service data integration.

Moreover, this massive pool of users greatly benefits

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’s AI training efforts. After the initial embarrassing launch due to ideological capture, the Gemini AI model family is now performing neck and neck with OpenAI’s latest offering.

Gemini 2.5 Pro is now sandwiched between

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-funded OpenAI models.

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’s Nova is on the tail end of performance. Image credit: Artificial Analysis

More importantly, as a multi-modal AI, Gemini’s video generation – Veo 3 – is the first one to break the uncanny valley wherein it is difficult to distinguish between real footage and AI-generated content. And equally importantly for adoption purposes, Veo 3 natively generates audio as it more strictly adheres to users’ prompts.

As prompt adherence is more accurate, this translates to fewer generative attempts. In turn, businesses who deploy AI apps on

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’s Vertex (NASDAQ:) and GCP, have to spend less on the company’s pay-as-you-go pricing model.

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implemented this model across its resources (CPUs, GPUs, TPUs) and services like Vision AI for analyzed images.

On the hardware end of AI deployment,

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also developed 7th gen Tensor Processing Unit (TPU) “Ironwood”, purportedly having 24x greater performance than the top ranking supercomputer El Capitan.

In short, it looks 2025 is going to be the pivotal year for

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Cloud, as the company invests $75 billion in data centers. And to compete with

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’s Azure on an enterprise level, recently launched Cloud Wan is offering up to 40% lower latency and reduction in wide-area network (WAN) expenditures.

In Q1 2025, GCP revenue increased 28% year-over-year, to $12.3 billion, ahead of

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Services (up 10%) of $77.3 billion. At an annual run rate (ARR), GCP generated $49.2 billion. As far as GOOGL stock is concerned, currently priced at $172.95 per share, the average GOOGL price target is $199.56, per WSJ forecasting data. This gives investors a 15% potential profit gain from Alphabet stock exposure.

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(Azure)

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’s Azure cloud service has a global market share of 22%.

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relies on its legacy Windows integration in addition to Office 365 for enterprise and consumer ecosystems.

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’s Azure Arc was particularly successful in entrenching it, as it integrates on-premise systems with cloud services.

However,

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Drive has an overwhelming advantage with its G Suite integration, holding a market share of over 70% (7.43% for just

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Drive). In comparison,

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OneDrive has a tiny market share at just 0.33%. This makes sense as

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’s services have been effectively free for years.

On the other hand, Azure generated over twice the revenue in Q1, at $26.8 billion, or $107 billion ARR. Due to costs associated with enterprise migration, and retraining, it is safe to say that

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’s cloud services are entrenched.

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’s integration of OpenAI in the form of Copilot only future-proofs that entrenchment.

Although Veo 3 is currently the top AI-powered video generator, it is also likely that OpenAI’s Sora will catch up in an ongoing AI race. In Q1, Azure’s yearly revenue growth is in the middle ground of 21% vs GCP’s 28%. Once again, if

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makes the right monetization moves, its seamless ecosystem, cross-platform and cloud-centric, has more space for growth.

When it comes to MSFT stock price, the average MSFT price target is $510.11 against the current price of $459.31 per share, giving investors a potential profit gain of 11% for

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stock exposure.

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.com (AWS)

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Web Services (AWS) has the dominant global cloud market share of 29%. To many, this is surprising given that

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is an ecommerce company while

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and

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are specialized software giants.

But as always, this relates to first mover advantage. Even before Azure launched in 2010, and GCP in 2008, AWS started offering cloud infrastructure in 2006 as a pay-as-you-go platform. Moreover, owing to its proven expertise in ecommerce and logistics,

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easily made the case for enterprises to move from on-premise servers to AWS.

The crypto sector especially became beholden to AWS, as major blockchains such as , and had the bulk of their node hosting on AWS. Although this caused some centralization concerns, it showcased that AWS has top architecture design for a variety of uses.

Over time, AWS gained a full-stack of AI tools that integrate into the cloud, the AWS Amplify kit for Bedrock (akin to

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’s Vertex). Likewise,

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’s Alexa evolved from a simple virtual assistant to a full AI agent as Alexa+. In addition to complementing its ongoing deployment of robotics, AWS should be viewed as a broader platform for enterprises and large industries.

In Q1, AWS tracked the lowest yearly growth of 17% to $29.3 billion revenue, and $117 billion ARR. Given the fact that AWS’s market share declined from 31% in Q1 2024, it is likely that GCP and Azure will continue to offset

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’s first move advantage.

Even if

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’s Nova multimodal AI drastically improves performance, it is still the case that it is not as integratable as either Gemini or ChatGPT. In terms of AMZN stock performance, AMZN average price target is $237.82 against the present price of $205.36 per share, giving investors a potential 15.8% profit gain, which is just slightly better than exposure to GOOGL.

***

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our

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prior to making financial decisions.

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#Cloud #Wars #Googles #75B #Bet #

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