Alphabet tops $100B quarterly revenue for first time, cloud grows 34%

> The safest investment you can make in this AI race is Alphabet.

From the technical/talent/funding side, I agree with you. With Alphabet, the real risk is that they lose interest/focus and kill (or pivot) products early. I don't really see that happening in the short term (considering the hype/investments/cash around AI) but maybe in the medium to long term if things start to get stale.

Even with that risk though, I agree with you.

If you look back at the dot com era, hardware companies did survive but weren't the financial "winners". Cisco is an example and a good comparison is Amazon - their bread and butter now is ecommerce, they dominate it and that was borne out of that bubble.

Alphabet also has massive market share with YouTube, solid cloud offerings, Waymo which already has driverless/unsupervised robot taxis and their old standby search which is morphing more into more AI answers when you throw questions in your browser.

Alphabet's P/E ratio is lower than the S&P 500's. Some may argue the S&P is mostly being held up by Tech and AI related companies so stock in Alphabet could be seen as undervalued and NVDIA as overvalued.

Hardware almost always ends up getting commoditized so investing in hardware companies for the long haul does carry maybe more risk than mainly software companies.

It's not that easy. Tim is probably rubbing his hands until he can bring anthropic under the apple umbrella.

NVIDIA also seems like a risky bet because Google has their own chips R&D. It's not just another data center buying NVIDIA's GPUs. BTW Apple is following suit regarding chips, don't know if at some point Apple will offer any cloud service or continue to work on their ecosystem only.

Beyond that there are a lot of new chip companies attacking the market: https://news.ycombinator.com/item?id=45686790

Google is literally, today, making money from AI. Not only that but the presence of competing AI services has resulted only in record revenue and straight quarters of ad revenue growth since ChatGPT was launched.

>maybe you should call Clearwater HVAC

Wouldn't one possible solution be just adding a sidebar with ads for products/services relevant to the current topic? They don't need to change the model output to have ads. (Not advocating for ads, just pointing out there's lots of ways to deliver ads)

They have an entire cloud division and they just announced it grew by 33%

and you think the competitors won't put ads in?

There is no way for anyone to resolve it, you'll either be paying premium, running last gen stuff locally, or getting ads, regardless of whether you use Google, OpenAI or anyone else.

I think App Engine was really ahead of its time in showing how simple cloud deployments can be. It had a similar ease of use as setting up a YouTube account. For that reason, a lot of people thought of it as a toy, which was kind of unfair because companies like Niantic were able to build global products on it. So a lot of Google Cloud afterward ended up being designed to be more "normal" like how Amazon is. Now people are seeing what normal gets them, so maybe it's going to be time for the Google way of doing things to finally shine. (Disclaimer: I'm a Google employee)

I am also a cloud consultant focused on AWS and a former employee of AWS ProServe (I have no love lost for the company).

But if you are a consultant, why pray tell are you spending that much time in the console except for occasional monitoring? Everything is either CLI commands or infrastructure as code.

And the issue with Google in particular is their customer support and business enterprise go to market sucks. The sales guys at ProServe use to run circles around GCP and never really took them seriously or had talking points. For big contracts we mostly had to compete with Azure because big boring enterprise was already using Microsoft.

When we did have to compete against GCP - and their sales team didn’t blow up the deal themselves - we just had to say “do you really want to trust Google with your workloads? Look at their history of abandoning products and raising prices”

Apple is a customer of all of the big cloud providers and was on stage at last year’s reinvent.

AWS throws money and people at startups. I’ve been on three sides - working at a 60 person startup who hosted on AWS, working at ProServe and now a third party consulting company where many deals come about because of AWS funding.

Old-timers who date back to when Joel Spolsky's early musings on the business of software development were fixtures on the HN front page will remember him using the phrase "fire and motion" for Microsoft's old strategy of constantly making changes so that everyone trying to keep up was—like the Red Queen—running as fast as they could but not getting anywhere.

> Watch out when your competition fires at you. Do they just want to force you to keep busy reacting to their volleys, so you can’t move forward?

> Think of the history of data access strategies to come out of Microsoft. ODBC, RDO, DAO, ADO, OLEDB, now ADO.NET – All New! Are these technological imperatives? The result of an incompetent design group that needs to reinvent data access every goddamn year? (That’s probably it, actually.) But the end result is just cover fire. The competition has no choice but to spend all their time porting and keeping up, time that they can’t spend writing new features. Look closely at the software landscape. The companies that do well are the ones who rely least on big companies and don’t have to spend all their cycles catching up and reimplementing and fixing bugs that crop up only on Windows XP.

—Joel Spolsky, "Fire and Motion," 2002

https://www.joelonsoftware.com/2002/01/06/fire-and-motion/

> it is a strategy employed to slow down development at other companies, and so help preserve the moat.

Worked at Google for 7 years, and your post reminds me it is time to share a secret: it is Koyaanisqatsi* and people's base instincts unbridled, no more. There is no quicker route to irrelevancy than being the person who cares about something from last years OKRs.

* to be clear, s/Koyaanisqatsi/too big to exist healthily and yet it does exist -- edited this in, after I realized it's unclear even if you watched the movie and know the translation of the word

I have a bunch of scripts that do the work for me so I can just run that in the background and do something else, and for one off tasks grumble and mumble a bit.

Microsoft, especially the Partner site for Microsoft Store and so on, is also exceptionally slow. Regular Azure not much better.

I guess the big providers learn from each other.

Do everything in terraform, never touch the console?

Oh my god I thought I was the only one. Everyone says that you should be using the command line anyway, but I'd rather use a GUI but it's disgustingly slow.

Unfortunately the software deployed on top of them will.

So you either:

1) postpone all your updates for years until a bad CVE hits and you need to update or some application goes end of life and you’re screwed because updating becomes a massive exercise

2) do regular updates and patches to the entire stack, including Linux, in which case, you’re in the same position you were before with running on the stack rot treadmill

So you might’ve moved the rot to a different place, but I don’t know if you’ve reduced any of it. I’ve owned stuff deployed off of vanilla VMs and I actually found it harder to maintain because everything was a one-off.

But then you have to maintain it yourself, which overall usually wilk be more work than just migrating from time to time

Your cost just shifts elsewhere, then. Rolling your own stack from Linux up is a big endeavor too.

In AI, whatever you wrote is going to be deprecated in theee months, and in six months SOTA LLMs will one-shot it directly. That's what it means for a domain to be "hot". AI is currently the largest and most intense global R&D project in the history of humanity. So for this one field, your complaint makes no sense.

Great read, thanks for sharing

It's already happening. Coal use in the US was up 15% in H1/25 compared to the previous year. Partially due to a shift from higher prices gas.

Coal retirement in the US is almost entirely driven by economics. If someone needs the power, coal plants will stay open and capacity factor go up.

https://www.eia.gov/outlooks/steo/report/elec_coal_renew.php

Apple is "taking it easy" because of embarrassing ineptitude, not because it's their strategy

AWS is lagging in AI, but not by choice. Their leadership is in an all out panic at the moment trying to catch up.

A lot of folks agree though that the smarter play would have been just just sit more on the sidelines intentionally and wait for the bubble to burst, then buy up stuff cheap in the resulting fire sales. AWS should have just focused on the core compute and storage services, which they do well.

AWS simply doesn’t have the right talent to do well in AI at the moment and the folks they did have mostly fled elsewhere.

I've seen how the cloud changed over 20 years from s3/ec2 in 2006 to what we have today. I've also seen how it's built at AWS. It's ironic they call it utility computing.

What I always feared as a user was that they'd invent a new billable metric, which happened a few times. Have you ever seen a utility add them at this pace? The length of your monthly usage report shows all those items at $0 that could eventually be charged. Let that sink in.

Another interesting element is that all higher level services are built on core services such as s3/ec2. So the vendor lock in comes from all propaganda that cloud advocates have conditioned young developers with.

Notice how core utilities in many countries are state monopolies. If you want it to be a true utility, perhaps that's the solution to get them started. The state doesn't need a huge profit, but it needs sovereignty and keep foreign agents out of its DCs. Is it inefficient? Of course. But if all you really need is s3/ec2 and some networking / queuing constructs, perhaps private companies can own higher tier / lock-in services while guaranteeing it runs on such a utility. This would provide their users reduced egress fees from a true utility which doesn't need (and is not allowed to have) a 50x profit on that line item.

The cloud providers themselves run their own generators. Computers aside, every place I worked at that did critical manufacturing ran their own generators as well. That said, I agree with your general statement, that this should be a commodity, but we’ve accepted that vendor lock in is better than having a department / the cost of humans lock-in.

It's not unheard of near me in a rural area to have a diesel generator in your garage as the electricity's unreliable just enough of the time, and especially given working from home is common nowadays losing electricity for 6h now and again isn't acceptable. That's not running your own generator for electricity as in your analogy, that's having a reasonable backup for short term redundancy. I think it's reasonable for companies to act similarly, rely on cloud but have a backup that provides at least degraded functionality as opposed to none.

The most pernicious effect of Big Cloud is the general erosion of infra know-how in the general public. People increasingly need to go out of their way to learn about computer hardware, networking, databases, disaster recovery, etc, when the default business decision is to outsource those tasks to a cloud service provider. For Cloud to become a commodity, computer professionals need to understand both infra and software.

Because utilities are commodities and natural monopolies. CSPs are neither.

Sort of an aside but utilities are done differently in many states and the expansion they are doing specifically to accommodate data centers is going to massively increase consumer rates

I feel like current VPSs feel like a commodity, most work the same, and even have the same ui

Utilities prices are also pretty damn high right now, not sure if that’s the best way to choose going forward.

Perhaps. I kind of expect that targeted LLM generated content will take over for ads, product placements etc.

Well kind of. They use the same data center infrastructure, with internal versions of the external GCP services.