Alphabet's Debt-Fueled Gambit Seeks to Catch Amazon in AI Infrastructure
Amazon and Alphabet, the parent company of Google, recently reported their Q2 numbers, revealing significant growth in their cloud computing businesses. Amazon Web Services (AWS) posted its fastest growth in 18 quarters, while Google Cloud surged 82% year over year.
Both companies are heavily investing in artificial intelligence infrastructure, with Amazon spreading its bets across a wide range of AI-related projects and Alphabet focusing on a full-stack approach through its Gemini platform. The key difference between the two is that Alphabet has taken on significant debt to fund its efforts, raising $70 billion in equity and debt.
Amazon's AWS reported revenue of $42.23 billion, with a 39.4% operating margin, while Google Cloud generated $24.77 billion in revenue with an operating margin of 35.6%. Alphabet's backlog reached $514 billion, compared to Amazon's $496 billion.