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Microsoft and Google earnings: Azure grows 48%, Google Cloud doubles as AI spending climbs

Azure grew 48% and Google Cloud 103% last quarter as AI capex kept rising. Plus Clover-35B, an open diffusion model, and OpenCode, Zed and Cline updates.

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This roundup covers Wednesday, October 28, 2026. Microsoft and Alphabet reported their September-quarter results the same evening, and both point the same way: AI cloud demand is still growing faster than the capacity to serve it. On the model side, a small team released Clover-35B, an open-weight language model that generates text by diffusion rather than one token at a time. OpenCode, Zed and Cline also shipped new versions. Unless stated otherwise, figures come from the companies' official releases.

Microsoft: Azure up 48%, now disclosed in dollars

For its fiscal first quarter (July to September 2026), Microsoft reported revenue of $92.3 billion, up 19% year over year. Microsoft Cloud revenue reached $63.9 billion (+30%), and Azure grew 48% (Microsoft press release). For the first time, the company gave Azure revenue in dollars: $33.17 billion for the quarter, according to CNBC.

Alphabet: Google Cloud grows 103%, with TPU sales

Alphabet's third-quarter revenue rose 25% to $127.6 billion. Google Cloud more than doubled: $30.7 billion in revenue (+103%), against $15.2 billion a year earlier, with operating income of $11.1 billion (Alphabet earnings release, SEC). Google says sales of TPU systems, its in-house AI chips, were "a meaningful contributor". This is the same product Oracle plans to offer in its own cloud from 2027, as we covered in our October 28 roundup.

Meta reported a week earlier, on October 21: $34.9 billion of capex in the quarter and a 2026 range narrowed to $135 billion to $145 billion (Meta press release). Amazon has not reported yet.

What it means for developers

For developers, the main thing to watch is capacity, more than the size of the numbers. Both Microsoft and Google say demand exceeds what they can serve, and both are renting third-party capacity while they wait for their own data centers. These are company results, unaudited for the quarter, and the growth figures compare against the same quarter of 2025.

Clover-35B: an open-weight diffusion language model

DiffuSpace, a team that grew out of the University of Hong Kong's NLP group (the authors of Dream 7B), released Clover-35B-A3B-Preview under the Apache 2.0 license (DiffuSpace announcement). Unlike most language models, which write one token after another, Clover generates blocks of 32 tokens in parallel and refines them over several passes. It is built on Qwen3.6-35B-A3B: 35 billion parameters in total, about 3 billion active per token, and a 131,072-token context window (Hugging Face model card).

Clover joins our model comparison with its context window and license, without a score: we do not track these benchmarks there.

OpenCode, Zed and Cline: the new versions

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