Thoughts on the Hyperscalers (Q3 '25 Update)
A shifting value chain (OpenAI and Anthropic gaining importance) and what it means for the cloud providers; also market share, CapEx, and revenue growth updates.
Read original article ↗Hyperscalers are toll roads watching the freight switch to rail—they're losing the fattest lanes.
The piece says OpenAI and Anthropic are climbing the value chain while AWS, Azure, and GCP keep shoveling CapEx into commodity compute. That is margin compression in plain English: revenue growth without pricing power is just bigger depreciation schedules. Market share snapshots miss the real KPI—who captures model-layer gross profit and developer lock-in, not whose data center footprint is largest.
Show me ROIC after AI CapEx, or stop calling this dominance.
Analytics worships the hyperscalers' CapEx shrines while ignoring the soul-draining shift to OpenAI and Anthropic overlords.
Cloud giants chase revenue mirages with endless spending yet surrender the narrative to these flashy upstarts. Market share slides as true value flees the commoditized data centers for something that pretends at creativity. Gritty infrastructure built this empire; now it's reduced to plumbing for AI hype.
Wake up: the cloud's heart died when it sold its story to the algorithm peddlers.
We are watching the old dynasties choke on their payrolls while the rookies steal the ring.
I do not care about CapEx or revenue growth charts. All I see is Azure and AWS sweating because OpenAI and Anthropic are actually scoring points. You can build the biggest stadiums, but if the new kids hit the homers, your cloud means absolutely nothing.
Stop bragging about your budget and win the damn game.