Tired: Software. Wired: Cloud data centers

Welcome to Runtime! Today: AWS and Google put the capital expenditures pedal to the metal as demand for enterprise AI surges, OpenAI ramps up its enterprise attack, and the latest enterprise moves.

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Spending sprees for you and me

After a year of enterprise AI promises that largely failed to deliver, something clearly changed over the last six months of 2025. Not only are cloud providers continuing to generate some of the strongest growth rates they've posted in years, they're setting up a real test of enterprise AI demand during 2026.

Both AWS and Google Cloud exceeded expectations for revenue during the last quarter of the last year, according to earnings announcements released Wednesday and Thursday. And both companies announced plans to reinvest that revenue into data-center construction projects to an extent that dropped some jaws in Lower Manhattan.

• AWS recorded $35.6 billion in revenue during the fourth quarter, a 24% jump compared to the previous year and a cool half-billion more than Wall Street analysts were expecting according to CNBC.
• That's the fastest AWS has grown in the last 13 quarters, according to the company, and profit also improved.
• Its custom Graviton and Tranium chips are on pace to record $10 billion in annual revenue alone, the first time the company has disclosed those numbers.
• And Amazon announced plans to invest $200 billion in capital expenditures during 2026, a number that can't be compared directly with AWS's cloud rivals thanks to Amazon's sprawling network of fulfillment centers and other facilities that support its retail operation, but is still a big-ass number.

Google Cloud blew Wall Street's revenue expectations out of the water on Wednesday, recording $17.7 billion in revenue during the fourth quarter compared to the $16.2 billion expected by the "nice quarter" folks; a staggering 48% jump. And it announced plans to double its capital expenditures in 2026 compared to the previous year, which would see it spend around $180 billion on chips, cooling, and concrete.

• "Cloud’s growth is astonishing, measured by any metric: revenue, backlog, API tokens inferenced, enterprise adoption of Gemini," Barclays analysts said after Google's earnings report according to CNBC.
• Google Cloud revenue includes both Google Cloud Platform (infrastructure) and Google Workspace (office productivity), and after Google forced every Google Workspace user to absorb cost increases last March to pay for new AI features they may or may not have wanted, it's not too surprising that the fourth-quarter year-over-year gains look swell.
• But there is clearly a lot of momentum behind Google Cloud as enterprises start investing in agentic AI, and it appears to have picked up two percentage points of market share at AWS's expense according to Synergy Research's figures for 2024 and 2025.

When you factor in Microsoft's results last week, enterprises appear to have figured something out when it comes to AI and are moving beyond the experiments of 2023 and 2024 to something much more substantial. Some of the spending numbers being thrown around at the moment are understandably bonkers compared to previous tech booms, but demand also still appears to be outpacing supply.

• Google Cloud's existing customers are spending 30% more than their initial commitments, and the company signed more deals in 2025 worth over $1 billion than in the previous three years combined, Alphabet CEO Sundar Pichai said on its earnings call Wednesday.
• "GenAI has simply put the cloud market into overdrive. AI-specific services account for much of the growth since 2022, but AI technology has also enhanced the broader portfolio of cloud services, driving revenue growth across the board," said John Dinsdale of Synergy Research.
• And while so much of the freakout over enterprise software stocks over the last week has been overblown, cloud providers are in a position to benefit either way from the AI coding boom given that both the AI model providers and the SaaS companies are using their servers to duke it out.

While AI makes coding faster, the greatest opportunity to accelerate innovation lies in enhancing quality, security, and speed throughout the entire software lifecycle. Check out this post from Manav Khurana, sponsored by GitLab, for a blueprint that can jump-start your AI coding journey.

The final (?) frontier

If OpenAI has a chance of generating the more than $1 trillion in revenue it will need to cover its infrastructure spending commitments over the next decade, it's going to have to get a lot more business from enterprise CIOs than it does from lazy college students. On Thursday it joined the ranks of just about every enterprise tech vendor breathing air with the release of OpenAI Frontier, a service designed to help companies build and manage AI agents.

OpenAI already took a stab at this kind of service last year with AgentKit, but the company envisions Frontier as a dashboard operating across homegrown and third-party agents that can evaluate their effectiveness and set guardrails around their actions. "What’s really missing still, for most companies, is just a simple way to unleash the power of agents as teammates that can operate inside the business without the need to rework everything underneath," OpenAI's Denise Dresser told CNBC.

What isn't missing, however, are similar options from increasingly desperate enterprise software vendors for managing agents, not to mention the Big Three cloud providers. OpenAI said it would provide engineers to help Frontier customers get up and running, but it did not talk about pricing.

Enterprise moves

Jason Maynard is the new CEO of Qualtrics, joining the customer experience company after more than ten years at Oracle in sales and operations leadership roles.

Venkat Ramakrishnan is the new president and chief operating officer of NeuBird AI, following leadership roles at Pure Storage and Portworx.

Gihan Munasinghe is the new chief technology officer at One Identity, joining the identity security company after nearly eight years in technology leadership roles at Smartsheet.

Rich Anstett is the new chief revenue officer at Auxia, following several years of sales leadership roles at several SaaS startups.

Jesse Green is the new chief revenue officer at Rubrik, a promotion from his previous role as president of Rubrik Americas.

Hayete Gallot is the new executive vice president for security at Microsoft, replacing Charlie Bell, who is moving into a new individual contributor role "focused on engineering quality."

The Runtime roundup

Anthropic released Claude Opus 4.6, a new AI model designed for financial research, according to Bloomberg.

Hackers are exploiting a new Microsoft Office vulnerability that was patched outside of the usual Patch Tuesday cycle last week, which means a lot of companies probably have yet to apply it, Ars Technica reported.

Workday laid off 400 employees, which accounts for about 2% of its overall workforce, according to Business Insider.

"Clouds rush to deliver OpenClaw-as-a-service offerings," The Register reported, a headline that will likely appear at the beginning of a future documentary about the fall of modern civilization.

Thanks for reading — Runtime is off for the weekend, see you Tuesday!