The AI Cost Paradox: When Capex Becomes a Return Alphabet's recent earnings report highlighted significant growth in its cloud business, with Google Cloud accelerating to 82% growth and cloud operating margin jumping to 35.
6%. However, this success comes at a price: capital expenditures (capex) hit $44. 9 billion in a single quarter, and free cash flow fell to negative $5. 9 billion.
In contrast, Microsoft's partnership with OpenAI has resulted in significant revenue growth, but at a cost. The company reported a $4.