Google justifies its massive AI spending with a booming cloud business
Google's cloud business is thriving, as companies adopting its AI and AI infrastructure services help the tech giant to report record profits. Alphabet investors have very publicly worried that the company's massive AI spending isn't worth the money. With the company's latest earnings report, those investors should be able to relax a little.
Key Takeaways
- The takeaway: Google's cloud business - driven largely by enterprise AI adoption - is booming.
The search giant saw Google Cloud revenue spike 82% from where it was this time last year, climbing to $24.
- 1 billion in profit, the company's earnings report shows.
Meanwhile, Alphabet's overall revenue grew 24% year-over-year during the past quarter to $119.
- In Q4 of 2025, Google reported that the app had 750 million users.
It's worth noting that spiking revenue isn't unusual for Google.
- "I think our compute capacity investments in '27," he said.
"We are seeing strong demand indicators, including long-term deals," he continued.
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Stats & Key Facts
- #The search giant saw Google Cloud revenue spike 82% from where it was this time last year, climbing to $24.
- #That's well above last quarter's generous year-over-year growth, which showed a revenue jump of 63% to $20 billion - and it handily beats what Wall Street analysts expected for this quarter's growth (the expectation was $22.
- #Those cloud gains were driven largely by enterprise AI solutions and enterprise AI infrastructure adoption, the company said, while also noting that its backlog of cloud contracting work - that is, work that it hasn't yet converted into revenue - had climbed to $514 billion.
- #1 billion, which is a massive jump from this time last year, when the company reported $28.
The takeaway: Google's cloud business - driven largely by enterprise AI adoption - is booming. The search giant saw Google Cloud revenue spike 82% from where it was this time last year, climbing to $24. That's well above last quarter's generous year-over-year growth, which showed a revenue jump of 63% to $20 billion - and it handily beats what Wall Street analysts expected for this quarter's growth (the expectation was $22.
Those cloud gains were driven largely by enterprise AI solutions and enterprise AI infrastructure adoption, the company said, while also noting that its backlog of cloud contracting work - that is, work that it hasn't yet converted into revenue - had climbed to $514 billion. 1 billion, which is a massive jump from this time last year, when the company reported $28. 1 billion in profit, the company's earnings report shows.
Meanwhile, Alphabet's overall revenue grew 24% year-over-year during the past quarter to $119. The company also saw Google Services revenue jump 15% to $94. "Our AI investments are redefining what's possible across every part of our business," said Google CEO Sundar Pichai during Wednesday's earnings call.
For more details please read the original article at TechCrunch AI.
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