Barclays: Cloud Giants Take Nearly Half of AI Model Revenue

A new Barclays report shows that for every $100 an AI model company earns, $35-$40 goes to cloud platforms like AWS, Azure, and Google Cloud as computing fees. Cloud providers make $10-$20 in profit from this, with margins up to 45%.

The report finds AI labs' inference profit margins jumped from 10% in 2025 to 50-65% in 2026, driven by enterprise clients and agentic workflows. API business has over 80% margins, while subscriptions like Claude Code and Codex sit around 70%.

Barclays predicts AI lab revenue will grow from $7 billion in 2024 to $690 billion by 2028. Training costs as a share of revenue will drop from 96% to 30%, shifting focus from training to inference. But by 2028, new asset-backed AI infrastructure could disrupt the current cloud giants' dominance.