AWS and Google Double Down on Cloud and AI: What Enterprise Buyers Need to Know From the Vendors’ Earnings

Both Amazon and Google recently released their Q4 and full year 2025 earnings. Cloud remains a primary growth engine, investment levels are increasing significantly, and AI-related workloads are being used to drive expansion. Here is what cloud customers need to know as we continue into 2026.

AWS: Growth Re-Accelerates Amid Heavy Investment

Amazon reported Q4 2025 revenue of $213.4 billion, up 14 percent year over year. AWS contributed $35.6 billion in quarterly revenue, reflecting 24 percent growth and its fastest growth pace in more than three years.

Despite strong AWS performance, Amazon’s stock declined after the call due to concerns around rising capital expenditures and near-term profitability pressure. Leadership emphasized long-term infrastructure investment to support sustained cloud growth.

AWS announced plans to increase annual investment to approximately $200 billion, largely directed toward data center expansion, power infrastructure, compute capacity, and chip development.

Google Cloud: Accelerating Revenue and Expanding Commitments

Alphabet reported Q4 2025 revenue of $113.8 billion, up 18 percent year over year. Google Cloud delivered 48 percent growth, reaching $17.7 billion in quarterly revenue and exceeding a $70 billion annualized run rate.

Google also reported that its cloud backlog expanded approximately 55 percent quarter over quarter to around $240 billion, reflecting strong multi-year enterprise commitments.

For 2026, Alphabet expects to spend approximately $175 to $185 billion in capital expenditures, about double what it spent the previous year, primarily to expand data centers and increase cloud infrastructure capacity.

What Are the Major Takeaways from Google and AWS’s Earnings?

• Cloud remains a primary growth engine for both providers.
• Investment levels are increasing materially, with both cloud vendors planning record capital expenditures for 2026.
• Multi-year cloud backlog and enterprise commitments are expanding, signaling longer contract durations and higher baseline spend.
• AI-related workloads are being positioned as the primary driver of incremental cloud growth.
• Both providers are aligning infrastructure expansion directly to anticipated enterprise AI and compute demand.

What The Earnings Means for Cloud Customers

Cloud Commitments Will Continue to Rise

Both AWS and Google are using AI adoption and infrastructure expansion to justify larger commitment contracts. Customers should expect:

• Higher proposed spend baselines
• Growth assumptions embedded into renewal models
• Incentives tied to adoption of new services

Internal and executive alignment on growth forecasts is critical. Unrealistic or miscommunicated projections often lead to overcommitted contracts, bogging down negotiations.

Incentives and Credits Will Remain Aggressive

With record capital investments planned, both providers are incentivized to drive consumption. Customers should expect competitive compute pricing, coupled with significant cloud credits to offset parallel run charges and professional services credits offsetting migration charges.

All these incentives will continue to be aimed at competitive displacement. However, credits will increasingly include conditions tied to new workload growth and service adoption. Enterprises should carefully validate migration assumptions, parallel run timelines, and whether credits truly offset incremental costs.

AI Is Being Used as a Commercial Lever

AI services are being positioned to increase total contract value while expanding multi-year commitments. Both vendors are using their own AI offerings to drive platform consolidation, though UE has seen many customers consider Google’s Gemini platform whether or not they are existing Google Cloud or Workspace customers, with Google proving increasingly effective at positioning the advantages of their toolset.

Enterprises with a clear roadmap can use this leverage in negotiations to drive increased incentive offerings. Those without one risk inheriting aggressive growth assumptions.

The Bottom Line

AWS and Google Cloud both delivered strong earnings results driven by cloud growth and expanded enterprise commitments, alongside significant AI adoption. Investment levels signal long-term confidence in infrastructure demand.

For cloud customers, the key takeaway is not just growth, it is the commercial impact. Providers are using infrastructure expansion and AI positioning to support larger Cloud Commitments and longer-term contracts.

Managing this environment requires disciplined forecasting, executive alignment, and careful modeling of long-term commitment risk.

As AWS and Google push record investment and larger cloud commitments, your next renewal carries more risk and more opportunity than ever. See how UpperEdge helps enterprises protect leverage and avoid overcommitment.