Their cloud revenue, fueled by AI, is projected to double to over $0.5T in the next 4 years. Strikingly, their AI opportunity could be as large as $2T.

Recent Battery Venture's and Goldman Sachs research highlights that:

“AI is dramatically lifting the fortunes of the public cloud providers, namely AWS, Microsoft Azure and Google Cloud. We estimate that by 2030, cloud providers could capture an extra $2 trillion in cumulative revenue from AI.”

If this sounds like an exaggeration, here is a recent example:

Combined Value for Amazon, Microsoft, and Google has nearly doubled 

Pre-ChatGPT: 

• Total Value of Amazon, Microsoft, and Google: $3,994 billion

• Their Share in $8T Total Enterprise Value: 49.93%

Today: 

• Total Value of Amazon, Microsoft, and Google: $7,085 billion

• Their Share in $16T Total Enterprise Value: 44.28%

While the enterprise value market doubled from $8T to $16T, the three cloud hyperscalers still hold nearly half of the market value. Their relative share has dropped slightly due to the faster growth in companies directly involved in AI technology, especially Nvidia, whose market cap grew 10X in the same period.

Still, cloud hyperscalers have been among the fastest growing companies with their market cap nearly doubling (2X) in this period, while many software companies couldn't show the same results.

This shift underscores the increasing importance of AI and it’s reliance on cloud in the tech ecosystem.

As Battery notes:

"with the market’s mega-cloud computing providers continuing to invest massively in AI infrastructure—particularly since the second quarter of 2023—we see growing capacity to handle a coming AI “supercycle”, a technology platform shift just as big as previous mobile and cloud-computing revolutions led by Apple and Amazon Web Services, respectively. Our estimate is that $4 trillion or more in market value is up for grabs as AI moves toward disrupting software, services and certain labor markets in the coming years”