New post format: a weekly rollup of links, comments on those links, activity updates and attempts at humor. The intention is quicker hits in addition to the less frequent big posts and more timely hammering on my favorite themes. Be sure to subscribe below and to the right to receive all my output via email.
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Q1 2023 Cloud CAPEX
Company level CAPEX spend, not just cloud infrastructure:
Amazon: $14.34B -6%
Google: $6.20B -36%
Microsoft: $7.8B +24%
- Amazon decline is moderating after two quarters of double-digit declines. My assumption is the decline is all on the retail side, as AWS CAPEX was still growing strongly through 2022 (need SEC filings for more detail).
- Google is overdue for a broad upgrade of their server fleet. Traditionally they have been on a four-year cycle, and 2022 was the fourth year. That cycle didn’t start last year and obviously not this quarter either. But no sign of GPU investment either as Google plays catch up in AI. Being a “Safety First” AI company would tend to keep your serving costs down. Or they’re just cutting CAPEX to make the quarterly numbers.
- Microsoft is presumably on a mad scramble for every GPU they can get their hands on.
Q1 2023 Cloud Growth
Growth rates for the hyperclouds continue to slow, but they are still doing double-digit growth on eight figure revenue run rates. AWS grew a mere 16%, but added $2.9B in incremental revenue, which is ~40% of a GCP. Unclear how GCP ever catches up given its growth rate is same as Azure, which is ~2x the size.
Meanwhile, in the Zuckerverse
Meta Reality Labs revenue was down 51% to $339 million, while losses were up 35% to $3.99 billion. Despite those numbers, Zuckerberg says, “A narrative has developed that we’re somehow moving away from focusing on the metaverse vision, so I just want to say up front that that’s not accurate. We’ve been focusing on AI and the metaverse, and we will continue to.” Note how he slipped AI in there.
Silicon Valley Follows Hollywood (For a Change)
A New Antitrust Doctrine
I wrote a post on the absurdity of antitrust policy and the need to keep perfidious private equity from ruining software companies. I’ll probably be nattering on about these issues.