Stronger demand and better monetization at the big cloud providers pushed Citi to lift its estimates, with the biggest bump landing in 2028
Citi Research has raised its AI services revenue forecasts for 2026 through 2028. The bank cited strengthening demand and improving monetization across the major cloud providers.
The revisions are not cosmetic. Citi lifted its estimates by 9% for 2026, 7% for 2027, and a hefty 17% for 2028.
What changed in Citi’s numbers
The upgrade centers on the hyperscalers, the handful of companies that run the world’s largest cloud platforms. That group includes Amazon Web Services, Microsoft, Google Cloud, and Meta. All four have been posting accelerating growth in both revenue and backlog, the pipeline of contracted business not yet booked as sales.
Combined, AWS, Meta, Google, and Microsoft reported 25% year-over-year growth in Q3 2026. The top-three cloud providers saw revenue growth accelerate to 56% year over year.
The usage data behind the upgrade
Two data points stand out in the case for stronger AI monetization.
First, Google Cloud now counts 2,600 customers that consumed more than 100 billion tokens over the past year. That figure was 2,000 in Q2. Tokens are the small chunks of text that AI models read and write, so token consumption works as a rough meter for how heavily customers actually use these systems.
Second, Microsoft 365 Copilot saw customer growth on consumption-based billing exceed 75% quarter over quarter. Consumption-based billing means customers pay for what they use, like a utility bill, rather than a flat per-seat license.
That shift matters. Flat subscriptions cap revenue per customer. Usage-based pricing lets revenue rise alongside adoption.
On the Amazon side, the company has guided for AWS growth exceeding 40% in both fiscal 2027 and fiscal 2028.
The capex picture keeps getting bigger
Alongside the revenue revisions, Citi estimates global AI capital expenditures will reach $1.68 trillion in 2027. That would mark a 64% increase from 2026.
The four leading hyperscalers, Amazon, Microsoft, Google, and Meta, are expected to account for approximately 64% of that total.
This is not Citi’s first upward move. In March 2026, the bank raised its long-term AI capex and revenue projections to $8.9 trillion for the 2026 to 2030 period. The latest revisions build on that already-bullish baseline rather than replacing it.
What this means for investors and the cloud race
Google is leaning on token consumption metrics to show enterprise traction. Microsoft is pointing to Copilot’s billing shift. Amazon is anchoring expectations with long-range AWS growth guidance.
Concentration is another consideration. When approximately 64% of global AI capex comes from four companies, any shift in their spending priorities could reshape the outlook for the entire sector.
