Holy mackerel: You blink one minute, GCP is haemorrhaging cash and about to join “killed by Google”; you blink the next and it’s a blooming $70 billion run-rate proper hyperscaler; hot on AWS’s heels and possibly about to be responsible for putting ChatGPT out of its misery too...

Google Cloud’s parent Alphabet is on an absolute tear: It just reported a record $403 billion in annual revenues; 75% of GCP’s customers are using AI and some 350 customers each processed more than 100 billion tokens in December alone. (Boy does that burn committed spend.)

It has also driven extraordinary AI workload efficiencies....

Here’s what keeps Sundar Pichai up at night however... 

Sundar Pichai on what keeps him up at night after $403b year
Google slashed Gemini serving unit costs a striking 78% in 2025 through “model optimizations, efficiency and utilization improvements.”
The StackEdward Targett

A few hundred companies with money to burn are merrily burning it on inference, as Alphabet’s earnings show. Not everyone is so cavalier or optimistic that all this alchemy will turn the dross of their data into gold. 

We spoke to the SVP of a large-but-frugal financial services firm this week who must, on this one, go unnamed. A segment worth capturing:

“We do a little POC [of an AI application], and we show that it’s 50% more expensive than doing it the way we did it. We started with over 400 AI use cases, and we pruned it down to three. [Then you’ve got people saying] ‘ok but that Neocloud gives you 50% cheaper on the GPU!’ Yeah, and you just added 10x the latency, plus the egress fees. Yeah. That’s not a win…” 

This mystery SVP told The Stack their focus is on “how can we do excellent refactoring of these models to run in whatever hardware is available” and steer engineers away from “just going for the easy button of the bigger model, which is very expensive on hard hardware to [get].”

That’s not the focus of the story below, but it is interesting context to it from the infrastructure side. nb: We’ll have more on running AI locally on commodity hardware, both on the infrastructure and toolchain front soon. Want to feed into that discussion? Get in touch. 

AI is changing coding: “Wonder and profound sadness”
AI is changing engineering, permanently. Former Amazon CEO on vibe-coding a CRM: “You can just do things!”
The StackThe Stack

Right, let’s get stuck into some newsy highlights. 

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When containers first came along, it wasn't always clear if that was a good enough isolation boundary, especially to people used to VMs; Kata Containers promise stronger isolation with the performance and scalability of containers. The coming V4 release is poised for trusted AI at scale and sovereign cloud. Mary Branscombe took a deep dive. 

Kata containers: Kubernetes workload isolation for secure AI
Kata’s stepping up from an isolation boundary for untrusted code to a mainstream option for sovereign cloud compute or trusted AI at scale
The StackMary Branscombe

Phillip de Wet has a disturbing take (with some expert insight) into how Iran cut off its Internet (with some BGP control and a grip on a tiny number of ASes that serve it) as it conducted one of the most grotesquely overlooked massacres in recent history. 

It took 17 years, but Iran has cracked internet censorship
“We did new graphs and they confirm the evolution towards one single point of interconnection between Iran’s domestic network and the global Internet...”
The StackPhillip de Wet

NATO has disbanded its CIO office and let go of its CIO…

NATO disbands discrete CIO Office - puts new man in charge of digital transformation
A sweeping reshuffle at the top of the alliance comes amid cloud migrations, interoperability efforts and…
The StackEdward Targett

The UK’s Ministry of Defence is now hiring for a CIO at a healthy £270k-£300k after influential and longstanding technology chief Charles Forte moved on. 

Ministry of Defence CIO Charles Forte steps down
“A unique opportunity” opens up to “drive change that matters within a very large scale and complex national and international context”
The StackThe Stack

Noah Bovenizer looks at the backdooring of popular Notepad++

Open source code editor backdoored for months, China linked
Hijacked Notepad++ update installed a “sophisticated and permanent” backdoor that sideloaded malware.
The StackNoah Bovenizer

And unlike Birmingham Council’s car crash attempt to shift to Oracle Fusion, ExxonMobil’s CEO is rather happy with this SAP migration…

SAP migration paying off, ExxonMobil CEO says in $15bn brag
The oil and gas giant is targeting a 2028 deadline for its S/4 HANA transition.
The StackNoah Bovenizer

All of that and a host more to read and explore on the homepage.

Coming up soon: A deep-dive into LiveKit, apropos the news that France is basing its sovereign video conferencing software on its OSS stack; a fresh look at Cilium, post-Cisco buyout of Isovalent; that feature on running LLMs and SLMs on-premises and a lot more. Make sure you're subscribed!

Want to learn how you can work with The Stack commercially? We hit an extraordinarily influential audience of major technology budget holders, across a mix of verticals globally. Get in touch here.

Thanks for reading, as ever. Ed













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