Google · Wall Street · Gemini · TechCrunch AI
Google justifies its large AI spending with a booming cloud business
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Alphabet investors have publicly worried that the company’s massive AI spending isn’t worth the money.
Key facts
- 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 company also saw Google Services revenue jump 15% to $94.5 billion
- The company’s profit hit $112.1 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
- Alphabet’s spending is still hefty, with its capital expenditures, the money it spends building data centers, buying chips, and expanding infrastructure, estimated to be between $180 billion and $190
Summary
Google’s cloud business, driven largely by enterprise AI adoption, is booming. 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. The company’s profit hit $112.1 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. “Our AI investments are redefining what’s possible across every part of our business,” said Google CEO Sundar Pichai during Wednesday’s earnings call.