Barclays said AI model companies are paying a large share of revenue to cloud providers for inference compute. The bank said that for every $100 in revenue generated by AI model companies, about $35 to $40 goes to Amazon Web Services, Microsoft Azure, and Google Cloud in inference fees. The report said cloud providers can earn roughly $10 to $20 in operating profit from that spend, implying margins of 35% to 45%. Barclays also said AI labs' paid inference margins rose from low double digits in 2025 to 50% to 65% or higher in 2026, with adjusted gross margin improving by 30 to 50 percentage points year over year. Analysts expect those elevated margins to decline as competition among frontier models intensifies and compute supply increases.