In an industry overly fixated on counting tokens and arguing about whose context-window is longer, the extraordinary growth trajectories of Google Cloud and Palantir reveal that customers are maniacally focused on clear business results powered by deep and end-to-end AI transformation.
While the AWS fanboys frozen in 2021 and the Palantir-haters who despise Alexander Karp‘s politics will shriek that the underlying financial numbers are meaningless, the cold hard revenue numbers representing customer demand and customer choice paint a very clear picture of who’s winning at this stage in the greatest growth market the world has ever known.
With Google Cloud reporting Q2 numbers on July 22 and Palantir on Aug. 3, let’s take a look at the remarkable accelerating growth trajectories for each company over the past 5 quarters, starting with Q1 of this year and running back through Q1 of 2025:
| Q1 ’26 | Q4 | Q3 | Q2 | Q1 | |
|---|---|---|---|---|---|
| Google Cloud | |||||
| *growth rate | 63% | 48% | 34% | 32% | 28% |
| *revenue | $20B | $17.7B | $15.2B | $12.5B | $11.4B |
| Palantir | |||||
| *growth rate | 85% | 70% | 63% | 48% | 39% |
| *revenue | $1.63B | $1.41B | $1.18B | $1.00B | $884M |
While the AI Revolution is helping pump up the growth rates for every company on my Cloud Wars Top 10 rankings, these truly extraordinary rates of acceleration from Google Cloud and Palantir stand apart and are evidence that something very different is going on within each company. Here are some reasons why (1) each company has clearly separated itself from its very capable competitive set and (2) both Google Cloud and Palantir have established clear first-mover status and momentum that will be hard — not impossible, but hard — to overcome.
- They were AI-native before AI-native was a thing. In the past few years, every tech company has gone to great lengths to describe how it’s been all over AI for decades — and I don’t doubt that they’ve been tinkering with AI for a while. But both Google Cloud and Palantir got past the tinkering stage more than a decade ago and were in some senses ahead of the market — but then ChatGPT happened, and the world changed overnight, and those two companies pounced on the opportunity in ways that were fully consistent to their central missions.
- Meeting customers where they are. Every tech company says that, but the actual doing is much more difficult than the saying. With Palantir, the clearest indications of its true commitment are the customer stories that come out on each earnings call whereby a customer who signed a deal for $X million re-ups just a few months later for a contract valued at $2X. For Google Cloud, every single element of the core strategies laid out by CEO Thomas Kurian upon his arrival 7 years ago are rooted in the idea that Google Cloud must see the uniqueness in each customer and then work with that customer to create an equally unique strategy for tying its existing foundation to future cloud- and AI-powered capabilities.
- “Open” is easy to say but hard to deliver. Both companies have built product and architectural roadmaps that embrace any model, any architectures, any data models, etc. And it’s telling to watch competitors claim that the unique and fully open approaches pioneered by Palantir and Google Cloud are actually “proprietary” traps out of which customers will never emerge.
- Blending world-class tech innovation with equally powerful GTM innovation. Last year, Google Cloud unveiled a major deal with Vodafone calling for a mix of the traditional — Vodafone spending close to $1 billion over 10 years on AI products and services — and the untraditional: the joint creation of a cybersecurity business built on Google Cloud SecurityOps platform and aimed at Vodafone customers. And just recently, Palantir agreed to offer its solutions on the Google Cloud platform and vice-versa while the companies also revealed plans to jointly develop industry-specific Agentic AI solutions.
- Building powerful ecosystems to create more value for customers. I’ve said before that I hope Alexander Karp is getting royalties for every time someone uses the Palantir-created terms “FDE” or “forward-deployed engineer,” and the company’s booming US commercial business — it grew 133% in Q1 to $595 million — is being strongly supported by a fast-growing partner network. And earlier this year, we saw a perfect reflection of Google Cloud’s unconditional commitment to its ecosystem when it declared that its ecosystem would handle 100% of its AI deployment initiatives. That is markedly different from what its four major competitors — AWS, Microsoft, OpenAI, and Anthropic — are doing because they’re all hiring thousands of their own FDEs to help with deployments.
Final Thought
Anyone who tells you that the stratospheric growth rates exhibited by Palantir and Google Cloud should be discounted because those companies’ revenues are not as big as some of their competitors is living either in the past or in an alternative reality or some combination of both. Look again at those numbers near the top: in a market filled with excellent and aggressive and often better-known competitors, it is clear that customers are flocking to Google Cloud and Palantir to steer those businesses into the AI Economy.
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