Google justifies its massive AI spending with a booming cloud business
TechCrunch Lucas Ropek ● Covered by 19 sources
Google's cloud business just posted 82% revenue growth, way past what Wall Street expected. Turns out all that AI spending is actually paying off.
Based on reporting by TechCrunch, Lucas Ropek — read the original for the full story.
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For months, Alphabet investors have been muttering about the company's AI bill. Tens of billions spent on chips and data centers, with not much proof it was worth it. Wednesday's earnings call put a lot of that grumbling to rest.
Google Cloud pulled in $24.8 billion this quarter, up 82% from a year earlier. That's not a typo, and it's not a fluke either — last quarter the unit grew 63% to $20 billion, so the trend line is bending upward, not flattening out. Analysts had guessed the business would land around $22.46 billion. It blew past that by more than $2 billion. Google says enterprise AI tools and AI infrastructure demand are the reason, and the company's unbilled cloud backlog now sits at $514 billion, which tells you client commitments are piling up faster than Google can invoice them.
The rest of the numbers cooperated too. Alphabet's overall revenue rose 24% to $119.8 billion, Services revenue climbed 15% to $94.5 billion, and profit came in at $112.1 billion — a wild jump from the $28.1 billion the company reported in the same quarter last year. Gemini, meanwhile, now claims 950 million monthly active users, up from 750 million just one quarter earlier of 2025. Sundar Pichai called the momentum
My take — AI-written commentary, not fact-checked reporting
I'm not shocked cloud is the thing bailing out Google's AI story — infrastructure always monetizes before flashy consumer apps do, and enterprises pay real money for capacity, not vibes. What I'd watch is that $514 billion backlog: contracts on paper aren't cash in hand, and $180-190 billion in annual capex only looks smart if 2027 demand actually shows up the way Pichai is betting it will.
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