Cloud Wars Live with Bob Evans

In today's Cloud Wars AI Minute, I explore the shift from using AI for workforce reduction to using it to amplify human productivity.
Highlights
00:18 — There's starting to be a better understanding that there's not a lot of value necessarily in just using AI to be able to do automation. What we're seeing is it does do a great job at this, and it frees up your resources to be able to go do other things.
00:36 — What we're starting to see, though, is some analysis coming back that is allowing us to be able to understand what we actually think is a wise strategy for those resources that are being freed up, versus bad strategies in organizations that may be looking at doing layoffs of certain resources and things.
01:16 — Gartner is now saying that by 2029, it's expecting 30% of all AI-driven layoffs to be rehired, and not only rehired, rehired at a higher cost than they were before. And that's due to the fact that there's going to be this sort of renaissance that we expect to happen, which is where companies that believe that they were going to get a ton of value out of AI, which they are, and they're getting freed up to be able to free up resources.
03:02 — AI and AI partnership with humans is actually resulting in being able to make a lot more value in a shorter period of time, and that makes it easier for your competition to be able to be even more competitive if they simply reinvest those resources versus just letting them go and taking a short-term bump on their revenue.

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In today’s Cloud Wars Minute, I break down the latest Cloud Wars Top 10 growth chart and the extraordinary momentum reshaping AI and cloud.
Highlights
00:03 — Got the latest Cloud Wars Top 10 growth chart numbers for you, in which we lay out here the hottest AI and cloud vendors in the world. And right now, we've got number one, Palantir; number two, Google Cloud; number three, Oracle. For Palantir, number one, 93% [growth].
00:53 — Google Cloud, up 82% to $24.8 billion. Like Palantir, Google Cloud has been on an upswing for the past few quarters. Oracle's cloud business, powered by its Oracle Cloud Infrastructure, up 62%, $11.6 billion in total cloud revenue. AWS completing, or now topping, a very nice return to growth over the last several quarters, up 37%, more than $42 billion in revenue.
01:30 — Microsoft's been growing its cloud business in the range of 25%, 26%, 27% for the last several quarters. Stayed on that, and at this size, $59.3 billion, this is just an extraordinary achievement. But I would point out here that this is the first time in a very long time that AWS has grown more rapidly than Microsoft.
01:54 — ServiceNow up 24.5% to almost $4 billion in revenue. SAP, 24% growth, $7.2 billion. Got Workday in at 14%, $2.47 billion. So they're at about a $10 billion annualized run rate. Salesforce, 11% growth, but a very big $11.3 billion in revenue.
02:18 — OpenAI is not a publicly traded company, so it doesn't have publicly disclosed details There's been a lot of talk that its annualized run rate is about $70 billion. And it said earlier this year it expected enterprise revenue to make up about half of total business. And if we take that $70 billion number, that's about $35 billion for the enterprise business.
03:39 — We see that while models continue to be very important, what's really powering some customer moves here and these big growth numbers is the rise of platforms for AI. We've got a number of the Cloud Wars Top 10 companies making it very, very easy now for customers to build their own agents, extend their own applications.
04:24 — Oracle and Microsoft both have RPOs that are approaching $700 billion. So, enormous demand. This isn't even revenue yet. This is contracted business that hasn't yet been recognized as revenue. So this is still to come in the future, but it shows incredible demand, and it isn't just coming from OpenAI and Anthropic.

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In today's Cloud Wars AI Minute, I look at how Microsoft is using Work IQ to make AI agents faster, more efficient, and potentially less expensive to operate.
Highlights
00:10 — Today, the topic is going to be Work IQ, and we're actually starting to see Microsoft make very interesting moves inside of Work IQ. We've already seen AI agents doing a lot of really interesting things, specifically around the Graph API. But the big difference here is Microsoft is really looking to monetize the ability for them to be able to do preloaded context, and so this allows us to be able to optimize our token spend.
00:47 — It's already pre-calculated and just provided to you. And what we're starting to see is that, with Work IQ, you can get about an 80% reduction in the amount of tokens that it would require for you to go derive the same sort of information out of your Graph implementation of your data.
01:10 — This is really powerful for organizations who are looking to optimize their token spend. It also means that there's going to be a lot of power coming into Microsoft around the ability for them to monetize this in a way that could be quite effective.
01:57 — This is going to be a very interesting world as Microsoft leans into the ability to monetize all of this context that it has from its Graph. The other thing that's a little interesting about it as well is that it didn't offer it as yet another SKU.

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In today's Cloud Wars Minute, I look at why Microsoft Work IQ could become increasingly valuable as enterprises deploy more specialized AI agents.
Highlights
00:12 — Microsoft's much-anticipated Work IQ is finally going into preview. Quick refresher: Work IQ is an intelligence layer that gives Copilot and AI agents context about how work happens across an organization.
00:27 — That understanding is grounded in business data from D365 and Power Platform. Cloud Wars CEO John Seifert has written up a great analysis of the launch and what it means for customers, which you can read now on CloudWars.com, but I wanted to take the opportunity to look at the wider implications of what Work IQ could potentially mean for the direction of the AI industry.
00:54 — Work IQ really demonstrates a shift in what it means to personalize AI. Up until now, Microsoft, like many other vendors, has talked about AI personalization in terms of your emails, your documents, your preferences. But, with Work IQ, there's a shift towards understanding the individual employee in the context of the organization.
01:23 — Work IQ is coming in at a point where the proliferation of agents has really become quite significant. We're way beyond general-purpose agents now, and we have specialized agents working across different areas like sales, finance, HR, etc. Increasingly, those agents need to coordinate.
01:42 — The question is whether agents can understand the shared organizational context well enough to coordinate with one another, and Work IQ is really enabling that shared understanding. And that links to my final point: the value of Work IQ could increase as Microsoft expands its agentic AI ecosystem.
02:14 — The more agents Microsoft introduces, and the more those agents need context to operate efficiently, the more valuable Work IQ could become as that intelligence layer underpinning them. And I think we could see that exact scenario play out in the companies using Work IQ as well. The more agents they deploy, the more valuable a shared intelligence layer will become.

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In today's Cloud Wars Minute, I unpack Sam Altman's comments on AI safety, security, and responsibility during his Dreamforce conversation with Mark Benioff.
Highlights
00:03 — I wanted to talk today a little bit about a discussion at Salesforce's recent Dreamforce event. It was a conversation with Salesforce CEO Mark Benioff and the CEO of OpenAI, Sam Altman, and they talked specifically about this whole notion of AI safety, AI security, responsibility, trust, and the recent disaster that OpenAI had when one of its models went rogue and attacked a Hugging Face server.
00:39 — Altman and Anthropic CEO Dario Amodei have become the leading proponents for, "Hey, let's slow down the whole industry." Let's slow down the whole industry while OpenAI gets its stuff together and moves forward. I've got a detailed, extensive article with a lot of verbatim comments from Altman that really do bear out the points I'm going to be making here.
01:35 — One of the big things here is that Altman just seems to be begging to be trusted. He says things like, "You should trust us to do the right thing because we want to do the right thing, and we know that the right thing to do is to do the right thing." I think you want to come in a little bit humble: "Hey, we made some mistakes. Here's what we're doing to correct it. We're going to redouble our efforts here, here, and here."
02:02 — Altman was more like saying, "Ah, you know..." It's almost like he's saying this happened to somebody else. He doesn't refer so much to OpenAI, but he said these big AI companies, and some of these big AI companies might now have more control, and some people are worried about what some of these AI companies might do. It was just a little bit surreal.
02:49 — And then he says, "Well, I'm disappointed in how it was framed." Now, I get to be disappointed. I've made a million mistakes, and I wish people hadn't always discovered them and pointed them out. But those were my mistakes, and I have to be responsible for them.
03:02 — And this was just totally the wrong note to hit, especially for enterprise customers. This whole thing about saying we always do the right thing, but he said now, in some cases, people won't do the right thing. He's talking about the whole industry here. So we always do the right thing, except when we don't do the right thing. It's hard to tell just what he meant.
04:54 — I don't think all this obfuscation and the fog that Altman was pumping out is going to help the case. I think that OpenAI needs to clean this up quickly. You know, spill on aisle six. We need the cleanup team over here. Anyway, check out this detailed article and the verbatim comments from Altman. I'll have that later this morning on CloudWars.com.

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