Cloud Revenue Hits $168B as AI Capacity Expands
Cloud infrastructure revenue reached $168 billion in the third quarter as providers brought higher-priced AI capacity online, reinforcing demand for new data centers even as power constraints slow delivery.
Get smart on it
Cloud infrastructure revenue reached $168 billion in the third quarter, representing a 55% increase from the year before, with AI-specific services now accounting for roughly one-third of total revenue. This growth is driven by cloud providers bringing higher-priced AI capacity online, though power constraints are slowing delivery. The market expansion is reshaping competition, with specialized cloud providers called neoclouds growing rapidly and eroding market share from established providers. Construction activity remains strong despite these challenges, with over 80% of new data center capacity in North America already preleased before completion.
Relevant courses
Want to go deeper than the news? Explore live, cohort-based AI courses taught by practitioners.
Browse AI courses on MavenRelated news
Elon Is Doing It Again: SpaceX Will Be The World’s Biggest AI Cloud
We wrote at length about how SpaceX’s plans for 10GW in 2027 was feasible, paving the way for +300b+ ARR. We received a lot of pushback from folks calling it impossible. Now, just two months later, we’re already seeing 3.6GW under construction across multiple sites, both existing and new. SpaceX has even revised its estimate up to ~13GW in 2027. This would be the largest amount of datacenter capacity ever built by any one company in that timeframe, roughly equivalent to all of Google
Data centers are turning to old jet engines as the wait for power grows
The years-long wait for access to the grid and new turbines is causing data center builders to turn to an unusual, less efficient and less environmentally friendly solution: once-discarded jet engines.
Ukraine’s drone strikes spur hasty Russian plans for underground data centers
Russian tech companies are scrambling to harden and hide their data centers underground after Ukrainian drone strikes damaged facilities housing AI supercomputers and disrupted cloud services for millions of Russian users. Meanwhile, the Kremlin is requiring data center owners to reserve computing capacity for emergency state needs and has even authorized possible use of foreign data centers. These consequences of Russia's war against Ukraine come as the Russian military has bombarded Ukrainian
AI’s Expansion Hits the Limits of Local Power
Power shortages and local opposition are delaying data center projects, making AI expansion harder, costlier, and more dependent on scarce grid access.
OpenAI pitches data center power plants as a way to protect nearby areas
In an announcement on Monday, OpenAI says it will pilot its "Grid Protectors Program" at an upcoming data center in Effingham County, Georgia, where the company promises to free up to 1,000 megawatts of power during extreme weather or emergencies, enough to power air conditioners in around 700,000 homes. The announcement comes as opposition to data centers spreads across the US, in response to massive projects that have begun development and construction, frequently with little
Introducing the Grid Protectors Program
OpenAI’s Grid Protectors Program will work with utilities to help future compute campuses support grid reliability and protect consumer electricity costs.