Welcome to episode 282 of The Cloud Pod, where the forecast is always cloudy! This week Justin, Ryan, and Matthew are happy to be joining you in the clouds versus watching election information. This week we’re talking nuclear energy, AI Search tools, and all things Pre:Invent. Welcome, and thanks for joining us!

Titles we almost went with this week:

The Cloud Pod Would Much Rather Record This Show Than Watch the Election Results
IBM Comes for Your AI Dollars
AWS Goes Limitless with the PostgreSQL Possibilities
It is Upon Us the Pre-Invent Period and AWS Does Not Disappoint
Amazon Loses Its Nuclear Superhero

A big thanks to this week’s sponsor:

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Follow Up

01:13 Energy regulators scrutinizing data center use reject Amazon bid

Late Friday, the Federal Energy Regulatory Commission rejected a proposal that would have allowed an Amazon data center to co-locate with an existing nuclear power plant in Pennsylvania.
The commission voted it down 2-1
FERC chairman Willie Phillips said that the commission should encourage the development of data centers and semiconductor manufacturing as national security and economic development priorities.
Commissioners Mark Christie and Lindsay See (both R) voted to reject the proposal, while Davis Rosner and Judy Change (D) didn’t vote.
Talen Energy, who signed the agreement, drew challenges from neighboring utilities AEP and Exelon – who challenged the novel arrangement, arguing it would unfairly shift costs of running the broader grid to other consumers.
FERC’s order found the region’s grid operator, PJM Interconnection, failed to show why the proposal was necessary and prove such a deal would be limited to the Susquehanna plant given the widespread interest in placing data centers next to power plants.
Talen said the ruling would have a chilling effect on the region’s economic development and it is weighing its options.
Will see what happens with Microsoft/Constellation energies plan to restart 3-Mile Island.

3:21 Justin – “It’s sort of sad because I kind like the idea of nuclear power to solve a bunch of problems, but it has to be done in the right way for sure.”

General News

04:12 IT’S EARNINGS TIME!

04:22 IBM revenue misses, but execs say AI will drive future growth

- This week, we have an additional company we don’t typically talk about… but IBM kicked off this quarter’s earning seasons which indicated that the AI dividend has yet to pay off for big infrastructure players.
- Earnings were 2.30 a share, excluding non-recurring items, and were eight cents better than consensus estimates.
- Although revenue rose 2% on a constant currency basis to $14.97 billion, they were slightly below the $15.08 billion consensus.
“We are very focused on ensuring we get an early lead position and establish IBM consulting as a strategic provider of choice for gen AI,” said Chief Financial Officer James Kavanaugh. “This is a long-term growth factor with a multiplier effect across our software, our platforms and our infrastructure.” About three-quarters of the gen AI business is consulting, and one-quarter is software.

05:32 Ryan – “…it seems like that’s a pretty good play to beef up, you know, your consultant side of the business to implement that. Because a lot of businesses are going to need to do that. And a lot of them don’t have the in house skills to do it.”

05:50 Alphabet stock soars as earnings crush estimates on strong cloud growth

Alphabet reported earnings per share of $2.12 on revenue of $88.27 billion for the quarter ended September 30th. Representing a profit and sales increase from the same period last year of 37% and 15%, respectively.
Analysts had expected revenue of $1.83 per share and 86.44 billion.
Advertising revenue topped expectations at 65.85 billion vs expectations of 65.5.
Cloud revenue was $11.4 b up 35% from the same period last year exceeding expectations.
Sundar Pichai said “this business has real momentum, and the overall opportunity is increasing as customers embrace gen AI”
Google plans to spend $13 billion on capital expenditures.

07:09 Matthew – “I mean, I was talking recently with some people and they were saying how a lot more of the really small companies are leveraging Google just because their developer experience inside the platform is much better than the other ones. It’s interesting to kind of see if that’s it, but it’s a ton of small companies to keep up with.”

07:40 Amazon stock jumps 6%; Q3 revenue up 11% to $158.9B; profits hit $15.3B; AWS sales up 19%

Amazon topped estimates for the 3rd quarter, reporting $158.9 billion in revenue, up 11% YOY and earnings per share of $1.43.
Profits jumped to 15.3 billion, from 9.9 billion a year ago.
AWS came in just below expectations at 27.4 billion in revenue, up 19%, with 10.4 billion in operating income.
Investors continue to keep a close eye on AI adoption on the cloud giant.
This is all interesting despite layoffs and unfavorable RTO policies; they are currently at 1.55 million employees, up 3% YOY.

09:17 Justin – “…it’s a crazy amount of people, by the way. I can’t even fathom having 1.5 million employees. Like, what do they all do?”

09:39 Microsoft dips on weak guidance after beating on earnings

Microsoft reported an earnings and revenue beat for the fiscal first quarter, but was bludgeoned for predicting slower growth than analysts expected.
Revenue was 65.59 or 3.30 per share vs the 64.51 or 3.10 per share expected.
CEO Satya Nadella said he feels pretty good that going into the second half of this fiscal year that the supply-demand will match up.
Azure growth was 33%, with 12 points of that growth coming from AI services.

10:47 Justin – “No, they were, they were applauded for doing well and beating expectations, but they were beaten because they predicted slower growth for this quarter and the next quarter. So it was more, I don’t think they lowered their guidance, but I think they basically said to expect it to be on the lower side of the range that they gave, which made investors unhappy.”

AI is Going Great – Or How ML Makes All Its Money

11:38 Introducing ChatGPT search

282: Search – ChatGPT vs Google…. Fight!