Reuters Alphabet shares slumped on Wednesday after its cloud unit39;s growth fell to near a threeyear low, paling in comparison to Microsoft39;s relative success as the tech giants race to make money from generative artificial intelligence.

Shares of Alphabet fell 9.6 on Wednesday, compared with a healthy 2.8 gain in Microsoft, on investor worries that the Google parent could lose share in the cloudcomputing market to Microsoft.

Cloud spending by businesses preparing to roll out AI features powered a rebound in growth for Microsoft39;s Azure platform in its first quarter. Growth at Alphabet39;s cloud unit was dampened by its big exposure to smaller clients.

Microsoft currently trades at 28.5 times its 12month forward earnings estimates, compared with the Google parent39;s 24.93.

In the battle to tap the next growth driver for the cloud business, Microsoft has focused on its core business clients that already use many of its software services, while Google has turned to startups..

Demand for artificial intelligence drove Microsoft39;s growth. Demand among Google39;s larger clients was similar, but the firm is more exposed to highgrowth and startup clients, which have been more aggressive with costcontrol efforts, Morningstar analyst Ali Mogharabi said.

The share losses suggest investors are concerned that Alphabet39;s focus on startups and slower rollout of AI services was delaying the earnings boost from the new technology.

Google Cloud offers AI capabilities…