Cloud AI revenue and backlog in 2026: AWS, Azure, Google Cloud and Oracle

In their latest quarters, Amazon Web Services grew 37 percent, Azure 43 percent and Google Cloud 82 percent, and the four big cloud providers reported contracted backlog of $496 billion (AWS), $678 billion (Microsoft), $514 billion (Google Cloud) and $664 billion (Oracle). Backlog is signed demand not yet recognised as revenue, and part of it depends on a few AI labs.

This post explains each number, what the companies said about it, how fast it turns into revenue, and why adding the four backlogs together is tempting but misleading. It is a companion to the capex scoreboard, which covers what these companies spend. This one covers what they earn and what customers have promised to buy.

All figures are as reported in the quarter named. Some come from company filings and releases, and others from news summaries of earnings calls. The text says which. None of this is investment advice.

Key numbers at a glance

• AWS revenue, April to June 2026: $42.2 billion, up 37 percent, the fastest growth in 18 quarters, a $169 billion annualised run rate. Source: Amazon release, 30 July 2026.
• AWS operating income: $16.6 billion, a 39.4 percent margin, against $10.2 billion a year earlier. Source: same release.
• AWS backlog: $496 billion, growing at a triple digit percentage rate year over year. Source: Amazon call, 30 July 2026, via MarketBeat summary.
• Amazon AI business and custom chip business: each above a $25 billion annual run rate, with triple digit growth. Source: Amazon call, via the same summary.
• Azure and other cloud services: up 43 percent in the April to June 2026 quarter, and above $100 billion for the fiscal year for the first time. Source: Microsoft release, 29 July 2026.
• Microsoft Cloud revenue: $59.3 billion, up 27 percent. Source: same release.
• Microsoft commercial remaining performance obligation (RPO): $678 billion, up 84 percent. Growth excluding OpenAI was 25 percent. Source: Microsoft release and call.
• Google Cloud revenue: $24.768 billion, up 82 percent from $13.624 billion. Source: Alphabet filing, 22 July 2026.
• Google Cloud operating income: $8.814 billion against $2.826 billion. Margin 35.6 percent against 20.7 percent. Source: filing and call summary.
• Google Cloud backlog: $514 billion, up by more than $50 billion in the quarter. Source: Alphabet call, via summary.
• Oracle remaining performance obligations: $664 billion, up $209 billion on a year earlier, for the quarter ended 31 August 2026. Source: Oracle release, 10 September 2026.
• Oracle cloud infrastructure revenue: $7.4 billion, up 121 percent, within total revenue of $19.3 billion, up 30 percent. Source: same release.
• Oracle and OpenAI: OpenAI accounts for roughly half of Oracle's backlog, per ERP Today's report on the call, 11 September 2026.

First, the terms

Three terms come up again and again.

• Run rate. A run rate takes the latest quarter and multiplies it by four. AWS revenue of $42.2 billion becomes a $169 billion run rate. It is a simple way to show size, not a forecast.
• Backlog, or RPO. Remaining performance obligations are the contracted revenue a company has not yet recognised. If a customer signs a five year contract worth $10 billion and $1 billion has been delivered, $9 billion is backlog. It is promised, not paid. Companies also differ in what they include, and Microsoft's figure covers all commercial contracts, not only cloud.
• Non-cancellable. A commitment the customer cannot walk away from without paying. Some backlog is firm in this way. Some can be reduced or restructured. Companies do not always say which parts are which, and none of the four gave a full split in its latest results.

Amazon Web Services

Amazon's release on 30 July 2026 shows AWS sales of $42.2 billion in the second quarter, up 37 percent. Operating income rose to $16.6 billion. The call summary adds that AWS operating margin rose 650 basis points year over year, or 520 basis points excluding a gain of about $600 million from the changing value of energy contracts. A basis point is one hundredth of a percentage point, so 650 basis points is 6.5 percentage points.

The backlog figure of $496 billion came on the call, where the chief executive said it was growing at a triple digit rate year over year. A summary of the call also reports that Amazon expects to double its power capacity by the end of 2027 compared with 2025, that much of the 2027 capacity is already reserved, and that demand is expected to exceed available capacity through 2026 and into 2027.

One more detail matters for reading Amazon's profit. Net income in the quarter was $62.6 billion, but that includes $53.4 billion of non-operating income that Amazon says came primarily from its investments in Anthropic. That is a gain on the value of a stake, not cloud revenue. Operating income, at $27.5 billion, is the cleaner measure of the business.

Microsoft Azure

Microsoft's fiscal fourth quarter ended on 30 June 2026. Azure and other cloud services revenue grew 43 percent. Microsoft does not give a dollar figure for Azure each quarter, but said Azure revenue passed $100 billion for the fiscal year for the first time. Microsoft Cloud revenue, which also includes Microsoft 365, Dynamics and other products sold through the cloud, was $59.3 billion, up 27 percent.

Commercial RPO rose 84 percent to $678 billion. According to the Motley Fool summary of the call, Microsoft disclosed the structure of that number in unusual detail.

• Growth excluding OpenAI was 25 percent.
• About 30 percent of the total is expected to be recognised within 12 months, and that portion grew 37 percent year over year.
• The part beyond 12 months grew 112 percent.
• The weighted average duration is 2.3 years.
• The finance chief said all of the sequential growth, meaning the increase from the prior quarter, came from customers outside the frontier model companies.

That last statement was aimed at a common worry, that backlog growth was only a few labs signing large deals. It addresses growth in the quarter, not the level, and the gap between 84 percent growth and 25 percent growth excluding OpenAI shows that OpenAI's commitments drove a large share of the increase over the year. Commercial bookings grew 18 percent excluding OpenAI and 10 percent including it.

Microsoft also reported a $3.2 billion gain from its Anthropic investment and a $480 million net gain from OpenAI investments in the quarter, both excluded from its non-GAAP results. Again, these are investment gains.

Google Cloud

Alphabet's filing shows Google Cloud revenue of $24.768 billion in the second quarter, up 82 percent. Operating income was $8.814 billion. Both are well beyond the pace a year earlier, and the margin of 35.6 percent compares with 20.7 percent a year before.

Backlog was $514 billion. On the call, as summarised by MarketBeat, management said it expects to recognise just over half of it as revenue over the next 24 months. That is the clearest conversion statement among the four companies. Management also said it is in a supply constrained position and plans to rent third party capacity in the third quarter as a bridge, which will cause modest near term margin pressure.

Google also recognised revenue for the first time from selling its TPU systems, its in-house AI chips, for delivery into customers' own data centres. The filing notes that Google Cloud product revenue comes mainly from these system sales but gives no separate figure.

Alphabet's net income of about $112 billion for the quarter includes roughly $98 billion of other income, mostly unrealised gains on equity stakes. AI Weekly, citing other reports, says the stakes include Anthropic and SpaceX. Treat that attribution as reported, since Alphabet's release does not name the companies.

Oracle

Oracle reports on a different calendar. Its first quarter of fiscal 2027 ended on 31 August 2026, and its release of 10 September 2026 gives remaining performance obligations of $664 billion, up $209 billion on a year earlier. ERP Today, reporting on the results call, puts the June figure at $638 billion, which makes the rise in the quarter about $26 billion. The release says Oracle booked more than $30 billion of additional AI cloud contracts in the quarter.

The revenue side is smaller than the backlog suggests. Total revenue was $19.3 billion, up 30 percent. Cloud revenue, which combines infrastructure and applications, was $11.6 billion, up 62 percent. Cloud infrastructure alone, the part that rents out computing including GPUs, was $7.4 billion, up 121 percent. The release also says Oracle delivered more than 300,000 GPUs to AI cloud customers since the end of its previous quarter.

Two details make Oracle's number different. First, ERP Today says OpenAI accounts for roughly half of the backlog, while the non-OpenAI part has more than doubled over the past year. Second, management expects about half of the total to turn into revenue within 36 months, per the same report. Compare that with Google's just over half in 24 months, and Microsoft's 30 percent in 12.

Oracle's financing is also different. The release says that, based on how the new contracts are structured, there is no incremental impact on its plans to raise capital. ERP Today reports the finance chief's explanation that most new contracts involve customer prepayments or customers supplying their own hardware. The cash flow statement in the release shows $11.4 billion of customer prepayments within operating cash flow, against none a year earlier. Even so, capital expenditure was $28.5 billion in the quarter, against $8.5 billion a year earlier, and free cash flow was negative $5.4 billion. Notes payable and other borrowings totalled about $125.3 billion at 31 August 2026, and Oracle raised about $20 billion by selling shares through an at the market programme during the quarter. ERP Today says Oracle did not say when free cash flow would turn positive. For the full fiscal year, the release guides to total revenue of at least $90 billion.

Customer prepayments matter for reading Oracle's backlog. When a customer pays in advance, Oracle gets cash before it builds the capacity, which reduces how much it has to borrow. It also means part of the risk sits with the customer, which has already parted with money. That is a different position from a provider funding every data centre on its own balance sheet and waiting for usage revenue.

Scale versus growth

Growth rates look dramatic, but the base matters. In the April to June quarter, AWS earned $42.2 billion, nearly twice Google Cloud's $24.8 billion. A 37 percent rise on a large base adds about as many dollars as a much higher percentage on a smaller one. Multiplying Google Cloud's quarter by four gives a run rate of about $99 billion (calculated from the reported figure, not a company number), against AWS at $169 billion, which Amazon states.

Profitability tells a second story. AWS earned a 39.4 percent operating margin. Google Cloud earned 35.6 percent, up from 20.7 percent a year earlier. Those are healthy margins, and they were reported while all three companies were also adding capacity quickly. Margins can fall when new capacity arrives before customers fill it. Alphabet warned of modest near term margin pressure from renting third party capacity.

Gains on AI lab stakes

Several of the big headlines in these earnings are not cloud results at all. Three of the four companies hold stakes in AI labs, and when those labs are valued higher, the holders book gains.

• Amazon: $53.4 billion of non-operating income in the quarter, which Amazon says came primarily from its Anthropic investments.
• Microsoft: a $3.2 billion gain from Anthropic and a $480 million net gain from OpenAI investments, both excluded from non-GAAP results.
• Alphabet: about $98 billion of other income, mostly unrealised gains on equity securities. AI Weekly says the stakes include Anthropic and SpaceX.

These gains are real accounting entries, but they say little about how the cloud businesses are doing, and they can reverse. The practical rule is to read operating income for the business and treat the stake gains separately.

Why you should not add the four backlogs together

It is tempting to add $496 billion, $678 billion, $514 billion and $664 billion and call it $2.35 trillion of AI demand. That sum is arithmetic on four incompatible numbers.

• Different scopes. Microsoft's figure covers all commercial contracts, including non-AI software. Google's is cloud. Oracle's includes database and applications as well as AI infrastructure.
• Different conversion periods. 12, 24 and 36 month statements are not comparable, and Amazon gave no conversion period in its release or in the call summary cited here.
• Overlap. The same customers appear in several backlogs. OpenAI is named in the Microsoft and Oracle numbers, and Anthropic is a customer of Amazon and Google, as covered in the Anthropic compute explainer and the OpenAI compute guide.
• Different firmness. Some of the backlog may be cancellable or restructurable, and none of the companies gave a full split.

A better habit is to read each company's backlog against its own conversion statement and its own capex. A company that books $100 billion of contracts but must spend $200 billion to serve them is in a different position from one that is customer-funded.

What this means for customers

If you buy cloud services, three practical points follow.

• Capacity is rationed. Amazon, Microsoft and Alphabet all said demand exceeds supply. If you plan a large AI workload, ask for committed capacity in writing, and ask what happens if the provider cannot deliver on the date.
• Concentration matters. A provider with half its backlog from one AI lab is exposed to that lab. That does not mean trouble, but it affects how you think about long contracts.
• Prices and terms can change with the spending cycle. Memory prices were named by Amazon as a reason for higher capex. Check renewal clauses.

What is firm and what is uncertain

Firm: revenue and operating income for AWS (Amazon release), Google Cloud (Alphabet filing) and Azure growth and Microsoft Cloud revenue (Microsoft release), Microsoft's RPO total, and Oracle's RPO, revenue, capex, free cash flow and borrowings (Oracle release).

Reported from earnings calls rather than filed: AWS backlog, Google's backlog and 24 month conversion, the Microsoft RPO breakdown, Oracle's OpenAI share and 36 month conversion, and the explanation of Oracle's prepayment structure.

Uncertain: how much backlog is truly non-cancellable, how much is concentrated in a few labs for Amazon and Google, and when Oracle's cash flow turns positive.

What to watch next

• Third quarter reports from Amazon, Microsoft and Alphabet, due in the coming weeks. Look for whether backlog keeps growing as fast, and whether conversion statements change.
• Oracle's October investor day and its next quarterly report, which ERP Today lists as the next checkpoints.
• Any disclosure that splits backlog between AI labs and other customers.
• Gains and losses on stakes in AI labs, which can swamp operating results. Amazon's $53.4 billion is the largest example this quarter.

Quick check

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Sources

• Amazon, second quarter 2026 results, 30 July 2026: https://ir.aboutamazon.com/news-release/news-release-details/2026/Amazon-com-Announces-Second-Quarter-Results
• MarketBeat, Amazon Q2 2026 earnings call highlights: https://www.marketbeat.com/instant-alerts/amazoncom-q2-earnings-call-highlights-2026-07-30/
• Microsoft, fiscal 2026 fourth quarter results page: https://www.microsoft.com/en-us/investor/earnings/fy-2026-q4/press-release-webcast
• Motley Fool, Microsoft Q4 2026 earnings call transcript summary: https://www.fool.com/earnings/call-transcripts/2026/08/07/microsoft-msft-q4-2026-earnings-call-transcript/
• Alphabet, second quarter 2026 earnings release (SEC Exhibit 99.1): https://www.sec.gov/Archives/edgar/data/0001652044/000165204426000066/googexhibit991q22026.htm
• MarketBeat, Alphabet Q2 2026 earnings call highlights: https://www.marketbeat.com/instant-alerts/alphabet-q2-earnings-call-highlights-2026-07-22/
• AI Weekly, Alphabet Q2 summary: https://aiweekly.co/alerts/alphabet-q2-cloud-jumps-82-to-248b-capex-hits-449b
• Oracle, Q1 fiscal 2027 results release, 10 September 2026: https://investor.oracle.com/investor-news/news-details/2026/Oracle-Announces-Q1-Results-Driven-by-Triple-Digit-Growth-in-Cloud-Infrastructure-Revenues/default.aspx
• ERP Today, Oracle Q1 fiscal 2027 results, 11 September 2026: https://erp.today/oracle-q1-fy27-results-664b-backlog-ai-contracts/

Last reviewed: 19 October 2026.