Morning Brief · October 28th 2026

Morning Brief, October 28th 2026

Google Cloud doubled its revenue and Alphabet's stock still fell 10%. Azure grew 48%. OpenAI is reported to be buying Google's chips. And formalized a 15,000-page proof in 24 days.

21 min read·Editorial by Nour Haddad

Google Cloud doubles, but Alphabet spends past its cash and the stock falls

Alphabet reported third-quarter revenue of $127.6 billion Wednesday afternoon, up 25%. Google Cloud more than doubled to $30.7 billion, and its rose to $11.1 billion from $3.6 billion a year earlier, a 36.2% margin.

The rest of the release explains the selloff. Capital spending was $51.4 billion, more than double the $24.0 billion of a year ago, and was negative $9.1 billion for the quarter. Net income fell to $26.5 billion from $35.0 billion, mostly because an $8.7 billion loss on equity securities replaced a $10.7 billion gain a year earlier. Diluted came in at $2.12.

CNBC reports the shares fell more than 10% . Alphabet kept its 2026 capital-spending at $195 billion to $205 billion and said spending will rise significantly in 2027, with details on the fourth-quarter call. Sundar Pichai said search query growth was the fastest in five years and that "Gemini 4 Argon and Carbon are now leading at the frontier."

A cloud business that went from a $3.6 billion to an $11.1 billion quarterly profit in a year is evidence that demand for AI computing is real and paying. A company that turned cash-negative while that happened shows who is fronting the money. SourcesA B

Cloud revenue growth, quarter ended September 30th

Company releases, October 28th 2026. Year-over-year growth in reported revenue.

Azure grows 48% as Microsoft's contracted backlog reaches $677 billion

Microsoft reported revenue of $92.3 billion for its fiscal first quarter, up 19%, on Wednesday. Azure revenue was $33.2 billion, up 48%, and Microsoft Cloud reached $63.9 billion. Commercial remaining performance obligation, the contracted revenue not yet booked, rose 73% to $677 billion.

Additions to property and equipment were $39.4 billion, against $19.4 billion a year earlier; the release does not give a separate figure for finance leases. Microsoft's stake in OpenAI produced a $207 million gain, compared with a loss of about $3.1 billion a year ago. Investing.com reported the shares up about 2.5% after hours, beating estimates of $90.61 billion in revenue and $4.72 in adjusted earnings per share.

Set beside Alphabet the same afternoon, the comparison investors drew was cash: Microsoft grew Azure at nearly half again its size and still produced positive free cash flow. SourcesA B

OpenAI plans to buy Google's TPUs, The Information reports

OpenAI plans to purchase Google's processing units, The Information reported Tuesday, citing a person familiar with the matter, and Reuters carried the report. OpenAI has rented through Google Cloud since mid-2025; a purchase would put Google's chips in OpenAI's own fleet alongside Nvidia's.

No volume, price or delivery schedule has been reported. OpenAI declined to comment and Google had not responded. The report lands the same day Alphabet said its cloud grew; a buyer of OpenAI's size choosing a second supplier is the sale Google's chip business has been built to win. SourcesB C

AI agents formalize the 15,000-page classification of finite simple groups in 24 days

Axiom Math says it directed produced a complete of the Classification of Finite Simple Groups, one of the longest proofs in mathematics, spread across more than 500 papers by about 100 mathematicians. The result is about 43.1 million lines of Lean, built on the Mathlib library, between October 2nd and October 25th. The code is public on GitHub.

The agents logged 34 deviations from the published record. Most were typos and dropped hypotheses. Two were real: a counterexample to a step in John Walter's 1986 proof of the Unbalanced Group Theorem, and a false equality in a lemma in Aschbacher and Smith's quasithin volumes, both repaired with help from Richard Lyons and Ronald Solomon, two of the classification's principal authors.

A machine check proves the formal statements follow from the axioms. It does not prove those statements say what mathematicians mean by the classification, and Axiom says human review of the definitions is still required. SourcesA A

Mathematicians question how to credit AI-generated results

The BBC reports mathematicians raising three objections to the recent run of AI-announced results: whether the results are new, whether company systems could have seen unpublished work, and whether journals can absorb the volume. The concern follows OpenAI's claims this week in complexity theory and harmonic analysis.

Formal proof answers whether an argument is valid. It does not answer who had the idea first, which is what a hiring committee or a prize jury needs to know. SourcesB

Anthropic cuts Claude prices 40% for every level of US government

Anthropic expanded its General Services Administration agreement on Tuesday to a 40% discount on Claude Enterprise, Claude for Government and the , with no minimum spend. For the first time it extends to state, local, tribal and territorial governments, and it will cover purchases through cloud providers in the coming months.

Anthropic estimates the savings at $1 billion and says about 500 US government organizations use Claude, with weekly Claude for Government users up roughly eightfold since February. Its examples include a Utah pilot in which 71% of 34 state developers reported saving more than 20 hours in four weeks. Those are Anthropic's own figures from its own customers. SourcesA

The Netherlands plans to cut 25,000 government jobs with AI savings as the reason

The Dutch government plans to eliminate 25,000 civil-service positions, more than 15% of the workforce, framed as savings from AI adoption, Semafor reported Tuesday. The AI deployment plans that are supposed to absorb the work have not been announced.

That order matters to the people being cut. A government that removes the jobs before it has shown what replaces them is betting the software arrives on schedule, and the risk of a late arrival falls on citizens waiting for a benefits decision. Semafor notes New Zealand is considering a cut of similar proportion. SourcesB

Updated

Anthropic's prospectus warns that power delays could slow the buildout

Anthropic's lists energy as a repeated risk, Semafor reports. It describes rising energy costs, delays in securing grid access and growing requirements to pay for grid upgrades, and says the company "may bear these costs even if the underlying [power] capacity is delayed or never realized."

Semafor puts Anthropic's commitments for chips and data-center leases at about $400 billion and its first-half loss at $81 billion. The Washington Post separately estimates AI companies could seek around $10 trillion for chips and data centers through 2032. SourcesB B

Anthropic buys a one-person drug company and reports early lab results

Anthropic said Tuesday it has acquired Mithril Medicine, a one-employee company developing treatments for two rare forms of muscular dystrophy. Founder Cody Tranbarger used Claude to run contracts and experiments across 11 outside labs and took a candidate from idea to promising mouse results in under 18 months. Anthropic says human trials could begin as early as late 2028.

It also reported results from six partners. BigHat Biosciences made and tested about 1,010 Claude-assisted antibody variants in roughly 10 weeks, and the best bound more than ten times more tightly. Enveda says Claude caught all 11 issues human reviewers found in 1,061 pages of manufacturing documents, and seven more.

None of these drugs has been tested in a person. The claim that holds today is about labor: one founder doing what used to take a staffed biotech. SourcesA

Nvidia's Vera Rubin racks and Vera CPUs go on sale at Oracle

Nvidia and Oracle said Tuesday that Vera Rubin racks and standalone Vera CPUs are on Oracle Cloud Infrastructure, with superclusters planned to reach multiple . The CPUs are pitched at the tool calls and code execution that agents generate, and OpenAI is named as an early Vera CPU customer.

Oracle's Acceleron networking will isolate untrusted AI-written code in hardware, and customers can scale and capacity separately. That split is the design claim worth testing: agent workloads spend a growing share of their time outside the GPU. SourcesA

Updated

AMD puts $1 billion into Meta's equity offering

AMD said Tuesday it will invest $1 billion in Meta's , joining Nvidia's $3 billion. Initial AMD Helios rack systems are installed and in testing at Meta, which will deploy a custom Instinct GPU built on the MI450 architecture.

Two chip suppliers are now buying stock in a customer whose spending they depend on. Each investment is small next to the $37.5 billion offering, but it ties the suppliers' fortunes to Meta's ability to keep buying. SourcesA

OpenAI and Oracle bring Oracle's business apps into ChatGPT

OpenAI and Oracle announced Oracle AI Workspace, which lets employees reach approved Oracle data and run business workflows from ChatGPT, and US customers can now buy OpenAI products through Oracle's marketplace. Oracle says 130,000 of its own staff use ChatGPT and more than 95,000 use Codex.

The page could not be opened from here, so the figures come from two newsletters quoting it. SourcesA C

Liquid AI releases LFM3, six small open models built on one backbone

Liquid AI released LFM3 on Tuesday, a family of six models of roughly 2 billion covering text, vision, audio, combined input and two . The text model, LFM3-1.7B, has a 256,000-token context and fits in about 1 GB at 4-bit precision. All six are on Hugging Face.

Liquid says it beats Qwen3.5-9B on and trails it badly on knowledge, 63.37 against 80.40 on . Companies with more than $10 million in annual revenue need a separate commercial license, so "open" here means free to small users. SourcesA A

Opera proposes WebAI, a way for web pages to call a model on the reader's own computer

Opera introduced WebAI on Tuesday, a proposed standard that lets sites run open-weight models such as Google's Gemma locally in the browser, plus Apple's on-device model on Macs. It is an opt-in preview in Opera One, with Opera GX and Neon to follow.

A model running on the reader's machine keeps their text off a server. Whether it becomes a standard depends on Chrome, Safari and Firefox, and TechCrunch names no standards body behind it. SourcesB

An outside analysis says ChatGPT search places licensed publishers first

ChatGPT's news search appears to give licensed publishers a separate path to the top of its answers, according to David Konitzny, a researcher at Berlin start-up Peec AI. In 1,000 sampled cases, partner summaries made up 70% of entries in positions one to three and 23% in positions seven to ten.

He identified 12 publishers across 43 domains, including Condé Nast, Hearst, Axel Springer, News Corp, Reuters and the Associated Press. OpenAI has not disclosed the arrangement and had not responded. If it holds, a publisher without a license is competing for the bottom of the list. SourcesC

An Anthropic engineering manager has stopped giving coding interviews

Felix Rieseberg, who has led engineering for Claude.ai, Cowork and Claude Code Desktop, wrote Tuesday that he no longer uses small coding tests because Claude beats people at them. He now reads résumés and portfolios for prototypes that show judgment, and says he has not found a full replacement.

His advice to junior engineers is to build a working prototype aimed at their manager's manager's goals. That works for the person who already has a job. For the graduate who needs one, the gate that remains is a portfolio, which favors people with the free time to build one. SourcesA

IBM gives AI agents their own identities and revocable permissions

IBM made Agent Identity and HashiCorp Vault 2.2 generally available Tuesday at its TechXchange conference, letting companies issue verifiable identities to agents, limit what data they reach and revoke access quickly. Discovery and containment of agents across platforms is in tech preview.

IBM cites Gartner's estimate that only 13% of organizations think they have the right agent governance in place. Treating an agent as a credentialed identity rather than a script running under a person's login is now the common enterprise answer. SourcesA

Ant Group's LingGuang 2.0 keeps working after the chat ends

Ant Group launched LingGuang 2.0 on Tuesday, an assistant with persistent memory that keeps managing tasks once a user leaves the conversation. With permission it can track flight and hotel prices after booking, find forgotten subscriptions in Alipay bills and turn school notices in DingTalk groups into tasks.

It connects to Alipay, DingTalk, Feishu, email and Xiaomi's Mijia home platform, and supports outside tools through . The difference from Western assistants is reach: Ant controls the payments app where the bills already are. SourcesB

ByteDance builds a full short-drama studio into Jimeng

ByteDance's Jimeng AI launched a studio on Tuesday covering scripts, characters, storyboards, video and post-production in one workflow. It runs on three in-house models, DreamScript, Anycook and DreamShot, and can remake an existing drama in a visual style for a different market.

China's vertical short-drama industry employs writers, actors and editors on very fast schedules. A tool that remakes one series for several markets reduces the number of productions needed. SourcesB

General Compute raises $100 million to rent out non-Nvidia inference chips

General Compute raised a $100 million co-led by Blackbird Ventures and Abstract Ventures, at a of about $800 million per TechCrunch, up from about $60 million after a May seed round. It buys chips from Cerebras, SambaNova and Positron AI and rents capacity, including guaranteed per second.

First major deployments are planned for early 2027, with more than 50 megawatts in development, on top of a $400 million debt facility announced earlier. Its claim of up to 40 times faster than GPUs is the company's own and depends on the workload. SourcesA C

Bots wrote three-quarters of the replies to a UK government consultation

Automated submissions made up 90,835 of the 118,756 responses to a 2023 UK consultation on banning disposable vapes, according to research in Tobacco Control reported by the Guardian. Nearly all of them opposed the ban. Officials detected and excluded them.

The detection worked this time. A public consultation counts responses, and generated text makes responses cheap, so any agency that weighs volume of opinion is now exposed. SourcesB

Researchers say generated disinformation is spreading ahead of the US midterms

Researchers told the Guardian that generative tools make it cheap to produce many versions of one false story ahead of the November 3rd midterms, and that thinner trust-and-safety teams and weaker moderation in languages such as Spanish make corrections slower. SourcesB

LEANN shrinks a 60-million-chunk search index from 201 GB to 6 GB

LEANN, an open-source from UC Berkeley's Sky Computing Lab that won best paper at MLSys 2026, stores a minimal graph and recomputes at query time. On a 60-million-chunk Wikipedia index it cuts storage from 201 GB to 6 GB. The repository, under the , has about 13,600 stars.

The trade is time: MarkTechPost reports some queries taking up to 44.8 seconds on an M1 Ultra Mac. That is fine for searching your own files privately and too slow for a live product. SourcesA C

Editorial

NHNour Haddad
Deployment & the Floor

Twenty-five thousand people in The Hague are the first test of the AI dividend

Three numbers came out of this week, and they belong in one sentence. Alphabet spent $51.4 billion on infrastructure in a single quarter. Microsoft now has $677 billion of contracted cloud revenue waiting to be booked. And the Dutch government plans to remove 25,000 civil-service jobs, more than one in seven, and called it AI savings.

The first two numbers are about who pays for the build. The third is the first serious answer to who pays for the payoff.

Go down to the person. Somebody in a Dutch benefits office, a permit desk, a tax unit. Semafor reports the cuts arrive "alongside" deployment plans that have not been announced. So the job is gone before anyone has shown what does the job. That is not how Microsoft did its own cut this week, which was a . It is not how Anthropic's pitch to US agencies works either: 40% off, no minimum spend, an eightfold rise in weekly users since February, and a Utah pilot where most of 34 developers said they saved 20 hours. Those are offers of more output from the same people. The Hague read the same brochure and wrote a headcount target.

There is a version of this that goes well. Governments carry backlogs, and a civil servant who no longer retypes forms is a civil servant who can answer a citizen. But the evidence that agents can carry public casework at scale does not exist yet. The productivity numbers on offer are vendor numbers from vendor customers, measured in weeks. Meanwhile a separate story this week showed that bots wrote three-quarters of the responses to a UK consultation, which tells you the public side of government is already absorbing machine-made load it did not budget for.

Here is my position: a government that cuts staff before it publishes the system meant to replace them is moving the risk of an AI shortfall onto the people who use public services, and the Dutch plan should be read as a fiscal decision with AI as the label. I would be wrong if the Netherlands publishes a deployment plan, with service-level targets, before the first cuts take effect, and then meets those targets. Watch the order of those two events. If the plan comes second, the savings were the point.

Prediction Watch

Supporting evidence: OpenAI signs another $10 billion-plus compute deal outside Azure (Prediction 2026-08-06-F6). We said OpenAI would sign another compute agreement worth at least $10 billion with a provider other than Microsoft. The Information reports OpenAI plans to buy Google's TPUs, but no value has been reported and neither company has confirmed it, so it does not settle anything. Settles August 6th 2027.

No change: a second AI data center discloses a comparable power delay (Prediction 2026-09-27-F1). Anthropic's prospectus warns that power delays could slow its buildout and that it may pay for capacity that never arrives. That is a , not a disclosed delay at a named site, which is what the call needs. Settles December 27th 2026.

New call: Alphabet guides 2027 capital spending above $240 billion (Prediction 2026-10-28-F1). Alphabet held 2026 at $195 billion to $205 billion and said 2027 spending will rise, without giving a number. We think the number it gives in February has a midpoint above $240 billion, roughly 20% over this year. Settles February 28th 2027.

Nothing settled today, and no open call is past its deadline. On the China and open-weights beat, Ant's LingGuang 2.0 and ByteDance's Jimeng studio shipped as products, and no Chinese lab released new open weights we could confirm.

Sources

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Afternoon Brief, October 27th 2026

Afternoon Brief, October 28th 2026