The Information Briefing newsletter

Oct 28, 2026 The Briefing By Nick Wingfield Supported by Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here. Greetings! There was a lot to digest from Wednesday’s earnings reports from Microsoft and Google, long the No. 2 and 3 players in cloud computing, respectively. But let’s start with the most interesting takeaway: Google’s cloud unit revenues are now within spitting distance of Microsoft’s Azure cloud revenues, thanks in part to Google’s sales of its AI chips, known as tensor processing units. For those of us who remember the days not long ago when Google was an also-ran in cloud, that’s a pretty stunning development. But we’re getting ahead of ourselves. The stellar third-quarter growth in Google’s cloud computing business was overshadowed by other financial results that disappointed Wall Street analysts, particularly weak growth in Google’s search advertising revenues. Google’s stock dropped nearly 10% in after-hours trading. Microsoft’s growth, meanwhile, played better with investors, sending its stock up about 3% in after-hours trading (Microsoft shares are up 12% for the year, compared to 2% for Google). First, let’s look at Google’s numbers. Alphabet, the search giant’s parent company, reported a 25% jump in revenue to $127.58 billion, which fell slightly short of Wall Street forecasts. Due to its enormous spending on AI, the company showed negative free cash flow of over $9 billion compared to positive free cash flow of over $24 billion in the same period a year ago. The figures that seemed to alarm some investors the most were Google’s search revenues, which grew 12% to $63.35 billion—the softest growth in the business since the second quarter of 2025. Those results seemed discordant with the fact that people are using Google search more than ever. Alphabet CEO Sundar Pichai said Google’s year-over-year search query growth rate is the highest it has been in five years, which he attributed to the company’s AI investments. But for the moment, Google isn’t showing as many ads in AI Mode, its AI-powered search results, as it typically does. “It’s worth noting the strong growth in AI Mode queries had an impact because of the lower monetization we were seeing in AI Mode,” Google Chief Business Officer Philipp Schindler said on a call with analysts, in explaining the disconnect. Still, there were those Google Cloud results to admire. Revenue from that business more than doubled in the quarter to over $30 billion, while the unit’s operating income tripled to $11.12 billion. That revenue figure was just shy of Microsoft’s $33 billion in Azure revenues for the period, which grew 48%. If Google Cloud keeps up its superior growth rate, it won’t be long before the business is bigger than Azure. Of course, the comparison isn’t totally apples-to-apples. Google Cloud revenues include a burgeoning server hardware business, through which the unit sells TPU systems to customers that put the chips in their own data centers. Google didn’t disclose exactly what its TPU sales were in the quarter, though it did say they were a “meaningful contributor to revenue growth.” Google executives primed analysts to expect TPU sales to have an even bigger impact on Google Cloud next year. “We’re seeing extraordinary demand,” Thomas Kurian, Google Cloud’s CEO, told them. Less is More at Microsoft Last month, when Microsoft announced it was overhauling how it reports its business segments’ quarterly results, CEO Satya Nadella promised “increased transparency.” Today though, one figure they had disclosed in the prior quarters—the number of paying users of its flagship Copilot AI software—was conspicuously absent. Previously, the company had said it had 30 million paying users of Copilot as of the end of June, up from 15 million at the end of 2025. Those customers each pay a $30 per month fee to use Copilot in its Office a