While Microsoft, Oracle, Google Cloud, and AWS have shattered all historical precedent in amassing a combined $2.33 billion in AI and cloud backlog, the professional hand-wringers continue to babble about “bubbles” while ignoring the broad and diverse customer set each hyperscaler has built.
Yes, I realize the future is uncertain and all manner of doomsday scenarios exist; and yes, I recognize the theoretical possibility that OpenAI or Anthropic or both of them could go kaput tomorrow and thereby gouge huge chunks out of those backlogs.
But, in the past 12-18 months, both OpenAI and Anthropic have complemented their explosive consumers revenue with massive inroads into the enterprise market with corporate customers who are eager —desperate? — to become AI-powered businesses as rapidly as possible.
Two months ago, OpenAI chief revenue officer Denise Dresser said the company now has two million enterprise customers, and that while enterprise revenue at mid-year made up 40% of OpenAI’s total revenue, that figure would jump to 50% by the end of 2026.
At Anthropic, the enterprise portion is reportedly even higher — 80%, according to a Wall Street Journal article from late last year — including megadeals with Deloitte and Cognizant that will put Claude in the hands of 820,000 employees.
Let’s check out the latest backlog numbers from the four hyperscalers — and as you view these numbers, please bear in mind that it’s okay to be impressed. No other industry in the history of the world has ever expanded at this rate — and while I’m sure that’s a big part of what makes the hand-wringers so anxious because there’s no roadmap or playbook for them to consult, it also means that traditional approaches simply won’t work.
As a result, we see each of those four superb companies doing what was previously unthinkable: using debt markets to find massive CapEx expansions, which in some cases has resulted in — gasp! — negative cash flows for a quarter or two. But there’s a reason these superbly managed companies are willing to break with those traditions, and that reason is reflected in these numbers — and while the dollar volumes are head-spinners, check out the growth rates as well:
| Backlog/RPO Total | Backlog/RPO Growth Rate | |
|---|---|---|
| Microsoft | $678 billion | 84% |
| Oracle | $638 billion | 363% |
| Google Cloud | $514 billion | 390% |
| AWS | $496 billion | 154% |
| TOTAL | $2.3 trillion |
Final Thought
Early in my career at a small but fast-growing company, several colleagues and I were making plans to attend Comdex, which had become the tech industry’s biggest and most-important event. We all booked nonstop flights, which seemed like a good idea until the owner of the company heard about it.
He explained that we could not all be on the same flight because the risk to the company was too great — if the flight were to go down, he said, a core part of the company’s employee base would be wiped out. After he left, I told the others I was keeping my reservation, and a colleague said that if “something happens,” I would be in big trouble with the owner.
And I replied that if “something happens,” being in the hot seat with the owner would be the very least of my troubles.
Yes, risk management is important. But, legendary companies are not judged by their risk-management capabilities.
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