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I have not looked into Meta, but when I look at the growth of Alphabet's cloud revenue, it looks pretty solid:

https://x.com/JonathanBeuys/status/1984882268817519036

That is revenue from real world usage of their datacenters. Usage their customers would not pay for if it did not have a positive ROI.

A pretty stable growth of 30% per year for the last 5 years. At a current level of about $50B per year.

What is the value of it, if it continues like this for another decade? Revenue would be at roughly $1T/year then.

In the face of this real usage and the growth of it, spending tens of billions of dollars on building out infrastructure looks ok to me.

discuss

ares623|4 months ago

That's literally just a line go up graph with no details whatsoever? Also, "According to Perplexity" why is it not "according to Alphabet"?

JonathanBeuys|4 months ago

Which additional details would you like to see?

According to Perplexity because instead of going through 20 earnings reports myself, I outsourced the task to Perplexity and then manually checked a few of the numbers to be reasonably sure they were correct.

oskarkk|4 months ago

> What is the value of it, if it continues like this for another decade? Revenue would be at roughly $1T/year then.

That's a big "if", usually things don't grow at 30% per year for 15 years.

JonathanBeuys|4 months ago

Do I understand your logic correctly that after 14 years of 30% growth another year is extremely unlikely and after 14.99 years it is almost impossible?

My logic is that we only have to take the next 10 years into account when calculating the probability.

And lots of things grew 30% or more for 10 years.

Bitcoin's market cap grew over 70% pa for 10 over years now.

Amazon's revenue grew over 60% pa for over 10 years in their early days.

I can think of many numbers, but would have to check: global solar installations, smartphone usage are examples that come to mind.

anilgulecha|4 months ago

Cloud spend overall has - CAGR of 30-35% from 2007 to 2025.

logankeenan|4 months ago

> Usage their customers would not pay for if it did not have a positive ROI.

I don't think we can assume that's true. Their customers are paying for it, but we don't know how profitable they are being with the AI compute they pay for.