Capex

Every major technology build-out requires two phases, according to Carlota Perez¹: the infrastructure to power it, & then the applications to pay for it.

Between 1996 & 2005, American telecom companies spent $1.5t building the internet in today’s dollars.² Meanwhile, applications riding on that infrastructure booked $180 billion of revenue.³

That’s an interesting ratio, isn’t it? Application revenue to infrastructure spend. It matters because the shorter the gap between the two, the sooner the infrastructure pays for itself. Let’s compare this to the AI era.

Google Cloud grew 63% year-over-year in Q1 2026. Amazon Web Services posted 28%. Microsoft Azure hit 40%. All three are exceptional. Only one hit 63%.

The divergence is striking. AWS & Azure resell compute. Google bundles compute with its own models. Whether that explains the full gap is unclear, but the structural advantage is not : Google owns Gemini & TPUs top to bottom, with no licensing fees to OpenAI or Anthropic. Its growth may be more profitable too.