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Big Tech in July 2025: the light and the dark

July 2025: AI drove strong earnings at Google, Microsoft and Meta, while a fierce AI talent war, Google's antitrust case and an Alexa privacy suit loomed.

First published in Japanese: August 4, 2025
English edition: November 2, 2026

Read the Japanese original on note「GAFAMニュース　2025年7月のまとめ」

In July 2025, one GAFAM company after another wrote its AI gains into its results as hard numbers, and the impact on the tech industry was anything but quiet. “Does AI actually make money?” July was the month that question got its clearest answer yet.

Behind the scenes, though, precisely because it is now clear that AI pays, a fierce scramble for top AI talent has broken out, with reports of enormous bonuses and moves that shake the industry’s ethics.

As always, let’s look at what GAFAM did this month from both a global and a Japanese perspective, through the two sides of AI: hope and concern.

The light side

AI lifts earnings

July was the month GAFAM collectively answered the question, “Does AI really translate into revenue and profit?”

Google, Meta and Microsoft all beat market expectations. AI in cloud and advertising paid off: Google Cloud grew 32% year over year [1] and Azure grew a strong 39% [2]. At Meta, too, AI-driven ad optimization contributed to revenue [3].

These results came mainly from business-to-business (B2B) adoption and use. Generative AI is directly solving concrete corporate problems such as operational efficiency and ad optimization, and it is now clear that it has entered the practical stage.

Apple and Amazon, which were expected to face headwinds from tariff costs, also held up well. Apple’s revenue rose about 10%, its services business hit a record high, and its stock rose after the announcement [4]. Amazon posted solid numbers, with AWS up 17.5% and advertising up 23%, but it fell short of market expectations and its shares dropped [5].

Even so, all five companies demonstrated that aggressive investment in generative AI leads to revenue. The competition around AI looks set to grow even fiercer.

OpenAI adopts Google Cloud

An unusual collaboration between rivals.

OpenAI, the developer of ChatGPT, began a partnership with Google Cloud to meet its own enormous demand for AI computing. This came to light in a supplier list published in July.

OpenAI had relied entirely on Microsoft Azure until now. By also tapping Google’s advanced chip resources, such as its TPUs, it appears to be aiming both to ease its shortage of compute and to strengthen its negotiating position.

For Google, working behind the scenes for a competing service (ChatGPT) is unusual, but it looks like a good opportunity to show off how well its own cloud handles AI [6].

Amazon’s biggest Prime Day ever

The annual sale was a record-breaking event.

Online sales during Prime Day, the US sale for Prime members held in July, rose 30.3% from the previous year to $24.1 billion (about ¥3.3 trillion), the largest ever.

There were also reports of new trends, such as shoppers using generative AI chatbots to search for products.

In Japan, the event was expanded to four days for the first time, offering plenty of bargains, from everyday goods to the latest coveted gadgets. Even with the economic outlook uncertain, consumers were eager to buy, and the sale seems to have given a boost to other Japanese retailers as well [7].

The dark side

The AI talent war heats up: huge bonuses and ethical concerns

As generative AI settles in as a “technology that makes money,” the race among GAFAM to poach top AI talent is overheating.

In July, Microsoft drew attention by hiring at least 24 AI engineers from Google’s DeepMind to strengthen Copilot development [8]. Meta, too, has been hiring prominent researchers one after another from OpenAI, Apple, Google and others, and there are reports of sign-on bonuses of up to $100 million being offered as it set up its “Superintelligence Labs” [9].

It reminds me of Shane Gu, who a few years ago, as a fluent Japanese speaker, served as something like OpenAI’s public face in Japan. He appeared in the media often, but before long he moved to Google DeepMind. Given that he originally came from Google, you could say he “went back to his old home,” but I doubt I’m the only one who finds this dizzying churn of people a little bleak [10] [11] [12].

Related: TV Tokyo BIZ on YouTube (in Japanese)

In response to these moves, DeepMind’s CEO said that while the trend is rational, it could distort the industry’s culture [13]. OpenAI CEO Sam Altman has also stressed that real value comes from “missionaries” who share the mission, not “mercenaries” chasing money. As he put it, “missionaries will beat mercenaries” [14].

It’s true that this kind of talent mobility speeds up technological competition between companies, but it also carries side effects, such as breaking the continuity of research and eroding organizational culture. In the US, there are already moves to scrutinize poaching practices from an antitrust angle.

And here is what quietly pains me: Japan’s name barely comes up in any of these talent-race stories. Even where there are excellent researchers and engineers, many of them quietly flow overseas and never come back.

Before we know it, the very soil that grows sharp new minds could be hollowed out. To avoid that future, isn’t now the time for a sense of urgency, and for action?

Google’s antitrust trial nears its end

In the US Department of Justice’s lawsuit over Google’s monopoly in search, the question of remedies was argued in July.

After Google was found to have broken the law at the end of 2024, the judge, at the closing hearing in July, took account of how the AI era is changing things, remarking that the tech industry changes dramatically within weeks, and hinted that he was leaning toward measures looser than the 10 years of oversight that regulators are demanding [15].

Options under discussion include, for example, banning Google’s huge payments to Apple for default search placement, but the judge is wary of tying Google down too tightly, citing changes in the market. A final decision is expected as early as August, and depending on the outcome, it could affect Google’s business practices and its partnerships with other companies (in Japan, for example, the relationship between Android devices and search).

Europe widens its probe of Apple’s App Store

On July 29, Spain’s competition authority, the CNMC, announced that it is widening its investigation into whether Apple imposes unfairly disadvantageous pricing conditions on app developers in its App Store.

The investigation, which began last year, concerns suspicions that developers cannot set their prices freely, which hinders competition. Apple counters that it provides a safe and trusted marketplace, but in Europe, with the Digital Markets Act (DMA) now in force, scrutiny keeps getting tighter [16].

In Japan, too, app fees are under debate, and depending on how this case plays out, it could ripple into developer support and fee structures.

Amazon faces a class action over Alexa eavesdropping claims

The privacy problem with smart speakers has landed in court.

On July 7, a federal judge in Washington state allowed a class action on behalf of tens of millions of users to go forward over claims that Amazon’s voice assistant, Alexa, recorded and collected users’ conversations without permission.

The plaintiffs argue that Alexa eavesdropped on more conversation than necessary and used the data commercially, and they are seeking deletion of the recordings and damages.

Amazon denies any wrongdoing and argues that it has safeguards against accidental activation, but privacy concerns could erode trust in smart home devices [17].

As smart speakers spread in Japan as well, easing users’ worries and ensuring transparency look set to be key challenges.

The moment it became clear that AI makes money, a ruthless poaching war began.

Under the beautiful banner of consumer convenience, competitors and the weak are being dragged down, whether consciously or not.

Light and shadow always sit side by side.

But I do hope they don’t let the dark swallow them.

…I’d be a lot happier that way, at least.