Google flexes its Arm; Metronome runs the meter
Today: Google's first custom Arm server processor is now available, Metronome's new tool could help SaaS companies switch to usage-based pricing, and the quote of the week.
Why Microsoft and AWS are giving thanks for the generative AI boom, why Supermicro is in big trouble, and the latest enterprise moves.
Welcome to Runtime! Today: Why Microsoft and AWS are giving thanks for the generative AI boom, why Supermicro is in big trouble, and the latest enterprise moves.
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At several points during 2023 it seemed like the decade-long boom in spending on cloud infrastructure services had finally come back down to earth, as enterprises and startups around the world started to think more critically about their cloud computing investments for perhaps the first time. Now that we've seen three quarters of data on cloud spending in 2024, it's clear that investment in AI infrastructure services is reversing that trend.
Both AWS and Microsoft reported strong cloud results this week that makes the doom-and-gloom of 2023 seem like ancient history. As you might expect, both companies attributed their growth to customer investments in AI services, and coming off of Google Cloud's even-stronger revenue growth suggests that the future of AI will run in Big Cloud.
AWS reported revenue of $27.45 billion during the third quarter, which is a 19% increase compared to last year.
For its part, Microsoft Azure exceeded expectations with 33% growth during its first fiscal quarter of the year, and company executives assigned 12 percentage points of that growth to its AI business.
Cloud customers are in a period of wild experimentation right now with generative AI, and there's no guarantee that the investments they're making now will translate into ongoing business. But both Jassy and Nadella seem confident that AI growth will continue to lift cloud spending into 2025.
With the notable exception of Nvidia, perhaps no other company benefited more from the generative AI frenzy than Supermicro, the longtime server vendor. Its stock rose an astonishing 2,000% over the last two years as investors looked to capitalize on demand for AI infrastructure, but it became clear this week that Supermicro is in super trouble.
E&Y announced Wednesday that it would no longer serve as auditor for the company, stating that it was "unwilling to be associated with the financial statements prepared by management" according to Reuters. That's about as devastating a thing you can hear from your accountants, and Supermicro's stock slid 33% on Wednesday and fell another 12% on Thursday.
The Wall Street Journal reported last month that the Department of Justice was looking into allegations by a former Supermicro employee of accounting irregularities, and E&Y's announcement only furthered speculation that criminal charges could be pending. Demand for AI servers will likely continue well into 2025, but Supermicro's competitors might be the beneficiaries.
Colby Winegar is the new CEO of Storj, after serving as chief revenue officer for the blockchain cloud storage company for several years.
Jay Parikh is the new … something at Microsoft, joining the company's senior leadership team in an unspecified role after scaling Lacework as CEO and building Facebook's forminable tech infrastructure over nearly a decade.
Matt Wood is the new commercial technology and innovation officer at PwC, following a long career at AWS in several AI leadership roles.
Cooper Werner is the new executive vice president and chief financial officer at F5, after more than 20 years in finance roles at the networking and security company.
Tim McKnight is the new CISO at UnitedHealth, joining the company during a fraught period following this year's security breaches and after five years in a similar role at SAP.
Ajay Awatramani is the new chief product officer at Five9, following several years in product leadership roles at Cornerstone OnDemand, Adobe, and Marketo.
Intel shares soared nearly 10% after the beleaguered chip company provided rosy guidance for the fourth quarter, even though revenue declined 6% in the third quarter.
It doesn't look like OpenAI will be ready to release GPT-5 this year, according to CEO Sam Altman, who said "all of these models have gotten quite complex and we can’t ship as many things in parallel as we’d like to" in a Reddit AMA.
Dropbox will lay off 20% of its staff, or 528 people, citing the need to reinvest in AI as its growth flatlines.
The Biden administration is getting closer to releasing a new executive order on cybersecurity, according to CyberScoop, although that order could be moot the minute it is released depending on what happens next Tuesday.
Thanks for reading — see you Saturday!