Google justifies its massive AI spending with a booming cloud business
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.
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 $24.8 billion. That’s well above last quarter’s generous year-over-year growth, which showed a revenue jump of 63% to $20 billion — and it also handily beats what Wall Street analysts expected for this quarter’s growth (the expectation was $22.46 billion).
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...
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