💻 Microsoft Resells the Frontier
• Google Cloud grew 82% YoY last quarter vs Azure's 43% — Google now compounds nearly 2x faster than Microsoft and ~3x AWS's 28%.
• Google owns its models and chips, capturing the margin a reseller pays away; cloud operating margin expanded from 20.7% to 35.6%.
• Microsoft's $678B contracted backlog is the largest of the three, but ~$220B of the ~$310B added this year traces to a single customer (OpenAI).
• Nvidia's 5-year CDS hit a record 82bps in July amid concerns over circular AI financing between Nvidia, OpenAI, Oracle and the hyperscalers.
• Nadella frames reselling as flexibility — "every model is substitutable" — but it means paying someone else's margin on every incremental workload.
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