Big Tech Earnings Reveal AI Reality

💡Tech Earnings but the AI Angle

Earnings season is in full swing:

• Microsoft: Jan 29th, 2025

• Apple: Jan 30th, 2025

• Amazon: Feb 6th, 2025

• Alphabet (Google): Feb 4th

• Nvidia (soon): Feb 26th, 2025

So, I got curious: what hidden information about AI can we decipher from their released data?

Clearly, the battle to dominate the cloud AI offering is on. Amazon Web Services, Microsoft, and Google Cloud are leading the race and will pour billions of capital expenditures into expanding their AI offering this year.

Check out the annual run rate these companies make from their cloud offerings:

AWS: $115.2 billion

Microsoft: $102 billion

Google Cloud: $48 billion

Note: Microsoft lumps together Azure, server products, and other non-Azure products, so it’s not 100% cloud.

While we can’t separate out pure AI features, we can look at how their world has changed since 2023 in terms of investing in this area. And there we see quite some changes:

Amazon

• Plans to invest $105 billion in AI infrastructure in 2025. This is an increase of 27% from 2024, which was already more than double from 2023.

• In regards to the supposedly low-cost competition from China (DeepSeek), Amazon CEO Jassy pointed out that he doesn’t see the AI services revenue going down at all. Even if the per unit price for companies goes down, they will see increased usage and onboarding to more services. Further growth is strongly expected from them.

• Source: Barron’s

Alphabet (Google)

• Plans to invest $75 billion in AI infrastructure in 2025. With $308 billion annual revenue for 2024, that’s a sizable chunk.

• Sundar Pichai mentioned a high demand for AI-powered services AND that they already have some great ideas for native ads in Gemini. Yes, we all saw that coming…

• 30% year-over-year increase in Q4 for cloud revenue - driven mainly by AI-powered services.

• Source: The Verge

Microsoft

• AI services contributed 13% of growth within Azure - now represents a $13 billion run rate up 175% year over year.

• Although they didn’t mention specific numbers, they also called out plans for significant investments in further AI offerings.

• Source: Morningstar

The Conclusion: Cloud Providers Win Big

Following Nvidia’s growth, the monetary benefits of generative AI are now pouring straight into the pockets of the large cloud giants. These companies can steer their salesforce towards AI quickly. Thanks to growing demand, cloud providers can achieve growth rates that they could have only dreamed of in new business just a few years ago.

And this is just the beginning. Expect even faster expansion as AI adoption accelerates.

Get this: In 2024 alone, cloud infrastructure services made around $330 billion, up $102 billion from 2022. AI demand is the fuel to this fire.

How Even Smaller Companies that put AI in the Center Win

Let’s take a look beyond the tech giants. What other companies could grow substantially by putting AI services front and center?

HubSpot

This one’s a beaut. HubSpot’s sales jumped 21% year-over-year in Q4. Earnings grew 31%. The company noted that 2024 was a transformative year for them, and they are now well on course to become the leading AI-first customer platform for scaling platforms.

What’s fueling this growth? AI upsells. HubSpot has a large, loyal customer base and started offering AI agents that can perform end-to-end workflows for sales, marketing, and customer service. It’s a great example of how AI offers real value to its customers and shows them an ROI immediately. Source: Investors

To dive into how AI agents change AI, have a read in last week's edition that talks about the shift from AI models to AI agents.

Monday.com

Another company successfully riding the AI wave is Monday.com. Adding AI-related features helped them drive growth of 32% year-over-year in Q4 2024. The CEO mentioned that in 2025, they would “double down on our AI efforts.”

What I love about Monday is HOW they integrate AI. One of their offerings is AI Blocks - a feature that allows users to add AI capabilities into already existing workflows without any tech knowledge.

The UX is brilliantly designed — users can customize AI actions to fit their needs. This makes it easy to access and super powerful—something I might explore deeper in a separate post.

Conclusion

2024 was a year where AI truly showed where the rubber hits the road. The numbers don’t lie — AI is fundamentally reshaping business performance.

The biggest winners (aside from the all-time greatest… Nvidia) are cloud providers and companies that integrate AI deeply into their workflows for added value.

But here is the real takeaway - for 2025, AI is not just a feature. It’s a strategy.

The companies seeing the strongest results aren’t just slapping AI into their portfolio. They are refocusing their sales, their operations, and the mindset of their people to create value.

• Big tech wins by turning AI value add into cloud demand.

• Smaller companies win by making AI a core differentiator.

• The ones who treat AI as a nice to have? They’ll be left behind.

From personal conversations here in the valley, I can tell you that at least some people from the more prominent companies said that proactively thinking about “integrating AI into all workflows and products of the company” is part of their 2025 strategy. There is strong encouragement to unlock value from AI in all areas.

So, for businesses and builders, the question isn’t “Should we adopt AI?” anymore. It has to be: “How do we design for AI-first growth?” That’s where big competitive advantages surface.