Google justifies huge AI spending with booming cloud business
Google/DeepMind
Alphabet's cloud revenue surged 82% year-over-year to $24.8 billion, driven by enterprise AI adoption. CEO Sundar Pichai highlighted strong demand and long-term deals, with capital expenditures expected between $180 billion and $190 billion for the year.
Alphabet investors have worried about massive AI spending, but the latest earnings report shows Google Cloud revenue spiked 82% to $24.8 billion, beating expectations of $22.46 billion. Enterprise AI solutions and infrastructure adoption drove cloud gains, and the company's cloud backlog reached $514 billion. Overall revenue grew 24% to $119.8 billion, with profit hitting $112.1 billion, up from $28.1 billion a year ago. Google's AI chatbot Gemini now has 950 million monthly active users, up from 750 million in Q4 2025. CEO Sundar Pichai said AI investments are redefining the business, with strong demand indicators and long-term deals. Capital expenditures for the year are estimated between $180 billion and $190 billion, with Pichai noting investments in compute capacity for 2027.
Source: TechCrunch AI —
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