Happy Friday.
The current thing in tech and business is Anthropic looking for a $900B valuation in its newest funding round.
Today’s lineupNew York Times Tech Reporter Mike Isaac at 11:30 AM
Contrary General Partner Kyle Harrison at 12:00 PM
Lightspark Co-Founder & CEO David Marcus at 12:15 PM
Mariana Minerals Co-Founder & CEO Turner Caldwell at 12:25 PM
Kickstarter CEO Everette Taylor at 12:35 PM
Netomi Founder & CEO Puneet Mehta at 12:45 PM
WndrCo General Partner Justin Wexler at 12:45 PM
OpenAI Member of Product Staff Alex Embiricos at 1:00 PM
by John Coogan
Google crushed, up 10%+ over the last few days as the market processes a bunch of good news from earnings. The core business is still growing. Google Search & other revenue was $60.4B, up 19% YoY. Cloud hit $20B, up 63%, and cloud operating income hit $6.6B (very strong margins). Cloud backlog nearly doubled to more than $460B, with more than half of the backlog expected to be recognized in the next two years. Long story short, higher capex is totally justified in a world of Cloud accelerations, backlog growth, Search durability, and demand for AI infrastructure.
Microsoft showed solid execution, but didn’t dramatically change the narrative. Stock is down ~2%. Investors wanted to see Azure growth, Copilot adoption, and solid justification for capex. Microsoft beat on headline numbers, revenue was $82.9B, up 18% YoY. From an analyst perspective, it was a “clean beat.” In terms of AI adoption, Microsoft added about 5 million M365 Copilot paid users. They have 20 million in total now. This is solid adoption, but still small when compared to ~450 million paid seats in total for M365 broadly. Market reaction was a bit choppy as the new OpenAI relationship gets digested. On the one hand, Microsoft is no longer the exclusive provider of OpenAI models among the big cloud platforms with the new OAI/AWS deal, but on the other hand, more growth for OpenAI is good for Microsoft’s equity stake in the company.
Amazon still tops capex forecasts, but AWS is reaccelerating. Stock moved slightly upward. Q1 2026 net sales were $181.5B, up 17% YoY, beating expectations. AWS was expected to see 25% growth, but they delivered 28%. Very good news. The ads business is still cooking to the tune of $17.2B and more importantly the chips business crossed $20B ARR. Big deals with OpenAI and Anthropic are justifying more and more investments in Trainium and AI infrastructure broadly.
Meta had a rough go. Huge drop, nearly 10% down following earnings. But the core business was extremely strong. Q1 revenue was $56.3B, up 33% YoY, beating expectations. Ad impressions rose 19% and average price per ad rose 12%. They raised the 2026 capex outlook from $115B-$135B to $125B-$145B. Not the highest projected spend, but Meta doesn’t have a Cloud business to accelerate like the other hyperscalers. Lots of questions about how that capex spend feeds back into cash flow when the company doesn’t have a platform with big enterprise AI contracts and massive RPO figures. Add to that the fact that Daily Active People declined sequentially for the first time since Meta began reporting the metric and you get into some uncertain territory, even though Meta explained that the decline was driven by internet disruptions in Iran and WhatsApp restrictions in Russia, not a real change in internet user behavior.
Overall, one possible takeaway is a fracturing of the AI narrative. Every hyperscaler reports a big capex number, but each company has a different story. Google is a full-stack platform, Microsoft is focused on enterprise distribution, Amazon is most aggressive on infrastructure and partnerships with OpenAI and Anthropic. Meta is currently about ad-optimization and still a potential option on frontier AI. The market likes short-term revenue evidence, but there are still many more strategies that will play out over the rest of the year.
HeadlinesBloomberg: Thiel’s Founders Fund Raises $6 Billion in Its Largest-Ever Haul
WSJ: Elon Musk’s Tesla Pay Package Valued at $158 Billion for 2025
TechCrunch: Sources: Anthropic potential $900B+ valuation round could happen within 2 weeks
SemiAnalysis reports Anthropic revenue now at $44B
WSJ: Spirit Airlines Prepares to Shut Down as Rescue Deal Falls Apart
WSJ: AI Investor Coatue Joins Data-Center Frenzy With New Venture to Buy Land
WSJ: Top AI Companies Agree to Pentagon Deals for Classified Work
Defense One: Former head of ‘Pentagon’s think tank’ joins Anthropic
The Information: Starcloud in Talks for $2.2 Billion Valuation as SpaceX Stirs Interest
FT: Huawei’s AI chip sales surge as Nvidia stalls in China
Bloomberg: Caterpillar’s Biggest Bear Folds as AI Power Demand Soars
Newcomer: California’s Billionaire Tax Heads for the Ballot. A Compromise Would Serve Everyone Well.
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