While the Chicken Little crowd is having conniptions over the hyperscalers’ surging investments in AI and cloud infrastructure, they are simultaneously overlooking the fact that Microsoft, Oracle, AWS, and Google Cloud are reporting combined backlogs of $1.63 trillion.
I’m certainly not dismissing the hyperscalers’ spiraling capex expenses, which for calendar 2026 will likely total about $645 billion. (The calendar-2026 capex totals look like this: AWS $200 billion, Microsoft $185 billion, Alphabet $185 billion, Oracle $75 billion — that’s a total of $645 billion.)
Nor am I forgetting that it’s very likely that for 2027, those same four world-shaping companies will very likely have to pony up another $750 billion or so, which would equate to $2 billion every single day to help fund the AI Revolution.
Rather, in these unprecedented times we need to bear in mind that this is not some abstract “if you build it, they will come” fantasy — quite the contrary.
Because “they” are already here! And the proof of that is in the latest backlog and/or RPO figures from the four hyperscalers, which explicitly state that those four companies have booked a combined total of more than $1.63 trillion in contracted business that’s not yet recognized as revenue.
Take a look:
| Company | RPO / Backlog Value | Growth Rate |
|---|---|---|
| Microsoft | $625 billion | 110% |
| Oracle | $523 billion | 438% |
| AWS | $244 billion | 40% |
| Google Cloud | $240 billion | 55% |
| Total | $1.632 trillion | — |
Some things to consider:
- The OpenAI Factor: Yes, a very large chunk of that $1.632 trillion total comes from commitments carried by Oracle and Microsoft to OpenAI for AI infrastructure, training, and inferencing. That probably totals about $550 billion, which still leaves a contracted-business pipeline of well over $1 trillion.
- The growth rates: Even in the greatest growth market the world has ever known, this combination of staggering RPO/backlog numbers and staggering growth rates cannot last over a sustained period. But it is absolutely, positively happening right now as the hyperscalers build out capacity to fuel a worldwide AI Revolution that will dwarf what took place in the Industrial Revolution.
- No, it’s not an “AI-training bubble”: While the lusty AI industry is certainly driving much of this momentum, it would be foolish to think that the $1.63-trillion backlog is isolated to just that slice of the global economy. I’m estimating that at least half of that total — call it $800 billion — is coming from enterprises across every industry that are betting their futures on the ability of the hyperscalers’ cloud and AI services to equip those enterprises for success in the AI Economy.
- Remember, these are short-term backlogs, not TAMs: Don’t mistake the $1.63-trillion figure as an all-in estimate for the total revenue of the AI Revolution — it is definitely not that. Rather, the $1.63-trillion total is the current RPO/backlog of contracted business not yet recognized as revenue for Microsoft, Oracle, AWS, and Google Cloud. And even if the growth rates listed above go down over the next few years — which they might or might not do — that $1.63-trillion total will almost certainly approach $2 trillion next year, and very likely more than $2 trillion in 2028.
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Final Thought
We are in unprecedented times, and there’s no playbook to follow. And I understand that for some people, the idea of four companies spending $645 billion in a single year is simply incomprehensible and must therefore be seen as foolish at best and suicidal at worst.
I would counter that by noting that Microsoft, Oracle, AWS parent Amazon, and Google Cloud parent Alphabet are four of the most successful and well-run companies the world has ever known.
And I would note that those enormous investments are not chasing wished-for revenue that might never materialize — rather, each of those four companies cannot keep up with customer demand.
No, it’s not a bubble — it is the shape of things to come. So be not afraid!
