Google Cloud has become a central pillar of Alphabet Inc.’s growth, with revenue commitments worth $58 billion expected over the next two years. The update, shared at a global technology conference, signals the cloud division’s growing importance in the AI-driven era.
The cloud arm has already surpassed a $50 billion annual run rate. CEO Thomas Kurian revealed that 55% of Alphabet’s $106 billion sales backlog is set to convert into revenue within two years, excluding future contracts. He also noted a sharp rise in demand, with a 28% quarter-on-quarter increase in new clients, which now includes nine of the world’s ten largest AI research labs such as OpenAI and Anthropic, despite them being competitors to Google’s own AI offerings.
While cloud computing accounted for only 14% of Alphabet’s total revenue last quarter, its growth is outpacing the company’s traditional advertising business. In the second quarter alone, Google Cloud revenue rose 32% to $13.6 billion, underscoring its role in driving the AI revolution.
To support rising demand, Alphabet is expanding its infrastructure investments, raising its 2025 capital expenditure forecast from $75 billion to $85 billion. With AI reshaping technology worldwide, Google Cloud is positioning itself as the engine of Alphabet’s next major growth phase.
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