Google Announces New Investment Firm Partnership for Enterprise AI Adoption

Google CEO Sundar Pichai

Amazon’s (AMZN) Amazon Web Services (AWS) and Google’s (GOOGL) Google Cloud are back in the headlines on Thursday with some fresh developments that point to continued enterprise cloud adoption and give support for capital spending plans from both of those hyperscalers. Let’s break it down.

Google Cloud Partners With Thoma Bravo

Generally speaking, when we see investment firm Thoma Bravo in the headlines, it’s because the company is making a high-profile acquisition, usually in the software and security spaces. Notable acquisitions include Verint Systems, Dayforce, Ping Identity, Proofpoint and SailPoint.

This time, however, Thoma Bravo and Google Cloud are partnering to advance AI adoption in Thoma Bravo’s stable of companies.

Thoma Bravo's portfolio of enterprise software providers will deeply embed Google's leading AI models and Agent Platform into the core of their product stacks. At the same time, Thoma Bravo's cybersecurity companies will partner with Google Cloud to help mitigate risks associated with enterprise AI. We find this particularly interesting given Google’s cybersecurity operations, which have been augmented by its March acquisition of Wiz as well as its 2022 acquisitions of Mandiant and Siemplify.

The underlying likelihood is that Thoma Bravo companies will be chewing up capacity at Google Cloud, helping Google continue to monetize that platform and oncoming capacity. As that happens, we’ll be watching the impact on Google Cloud margins. Those margins have steadily improved over the last several quarters, reaching an operating margin of 30% in Q4 2025. Arguably, there is more room to go compared to AWS’s operating margin of 35%. With incremental margins near 56%, every incremental revenue dollar at Google Cloud drops quite a bit toward the company’s bottom line.

Google Gemini and the Department of Defense

Following the Department of Defense’s (DoD) falling out with Anthropic, we’ve seen OpenAI and others look to deploy their models inside the DoD. The Information is reporting that Google has unsurprisingly tossed its Gemini hat into the ring for classified use, and this move could be one that builds on the existing Google-DoD relationship.

Google is one of four companies, alongside Amazon, Microsoft (MSFT) and Oracle (ORCL) , selected by the Pentagon for the $9 billion Joint Warfighting Cloud Capability contract, a multi-cloud agreement designed to provide enterprise-wide cloud services to the DoD until 2028. The Department of the Navy, U.S. Air Force, and Defense Innovation Unit (DIU) are active users of Google Cloud technology, with the Navy recently awarding task orders for cloud migration via the JWCC contract.

We’ll look to see how successful Google is on this front, but the Pentagon announced almost a month ago that Palantir’s (PLTR) Maven AI system would be named an official program of record. That decision is expected to go into effect with the next federal fiscal year that begins in October. However, given developments between Anthropic and the Pentagon, and the use of Anthropic’s model by Palantir’s Maven, perhaps Google could slide into place.

We’ll add it to our list of things to track for GOOGL and PLTR shares.

Expanded Relationships for AWS With Fox and Oracle

On Thursday morning, Oracle announced it will give customers enterprise-grade, high-performance connectivity between Oracle Cloud Infrastructure and AWS. While this is a nice positive for AWS, the reality is it speaks more to companies like Oracle, SAP (SAP) and others becoming increasingly platform agnostic, opting to offer their customer platform flexibility.

We see this in a similar boat as those companies working with various AI models rather than exclusively partnering with one.

AWS also announced an expanded relationship with Fox Corp. (FOXA) that will see it power the company’s FOX One direct-to-consumer streaming platform. Included in that is AWS’s cloud and generative AI capabilities, as well as machine learning services. Other major streaming platforms that rely on AWS include Netflix (NFLX) , Disney+ (DIS) , Hulu, Comcast’s (CMCSA) Peacock, and, of course, Amazon’s Prime Video.

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At the time of publication, the Pro Portfolio was long AMZN, GOOGL, MSFT and NFLX shares.