Gemini and Copilot are involved in a very competitive dynamic related to the leadership in artificial intelligence, but the strategic focus of Microsoft on enterprise markets can contribute to a 100% revenue growth immediately regardless of the fact that Alphabet has already been ahead in terms of user adoption.
User Numbers Explode
The Gemini platform of Alphabet surpasses 650 million users per month, more than 70% of our Cloud customers use our AI, 13 million developers have built with our generative models due to considerable gains in the App Store and its internalization in Google Search.
The launch of Gemini3 on 18 November deserves to speed up interaction even more, as the volume of queries increased 3 times quarter-to-quarter.
However, Microsoft has an equivalent number of users with its Copilot platform, as it focuses on enterprise penetration.
On the latest earnings call, CEO Satya Nadella said
Microsoft now counts roughly 900 million monthly active users of AI features across its products, and more than 150 million users of its Copilot assistants.
In the first quarter of fiscal 2026, Microsoft’s revenue rose 18% year over year to $77.7 billion, while earnings per share increased 23% to $4.13.
Revenue from its cloud businesses, including Microsoft 365 Commercial, Azure, Dynamics 365, and other cloud services, reached $49.1 billion in the period, up 26% year over year.
Its “Azure and other cloud services” (primarily Azure) saw revenue rise 40% year over year as customers shifted more workloads and AI projects to the platform.
Revenue Engines Rev Up
Gemini brings revenue of Alphabet in terms of subscription to $12.87 billion, which increased by 21 % annually, and indirectly a 34% growth of Google Cloud to $15.1 billion.
“Cloud and AIis the driving force of business transformation across every industry and sector,”
said Satya Nadella, Microsoft’s chairman and CEO.
“We’re innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads.”
Microsoft reported Q1 FY2026 revenue of $77.7B, up 18% YoY, driven by strong cloud and AI demand. Operating income rose 24% to $38B, while net income reached $27.7B GAAP and $30.8B non-GAAP.
Cloud revenue jumped 26% to $49.1B, with Azure up 40% in constant currency. The company’s commercial RPO climbed 51% to $392B, and bookings more than doubled, fueled by major OpenAI contracts.
Microsoft extended its OpenAI partnership through 2030, securing an additional $250B in Azure commitments. Nadella said Microsoft is expanding its AI data center capacity by 80% this year.
Who Wins the Race?
Regarding straightforward measures, the wide scope of Gemini may enable Alphabet to increase 100% of AI-related revenue in less time possible, possibly, by serving more than 1 billion customers.
However, its alliance with OpenAI and deep integration into the offerings of Fortune 500 companies gives Microsoft an enormous upside of up to $360 million in agreement fees with one million users, and strong prospective growth in the high-single digit in 2030, even as supply constraints can continue to be felt even after mid-2026.
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