{"slug": "google-justifies-its-massive-ai-spending-with-a-booming-cloud-business", "title": "Google justifies its massive AI spending with a booming cloud business", "summary": "Alphabet reported Google Cloud revenue surged 82% year-over-year to $24.8 billion, driven by enterprise AI adoption, beating analyst expectations of $22.46 billion. The company's overall profit hit $112.1 billion, up from $28.1 billion a year ago, as Google CEO Sundar Pichai said AI investments are redefining the business. Alphabet's capital expenditures are estimated between $180 billion and $190 billion for the year, with Pichai signaling compute capacity investments in 2027 will pay off.", "body_md": "Alphabet investors have [very publicly worried](https://www.cbsnews.com/news/ai-bubble-tech-selloff-investment-consumer-business-demand/) that the company’s [massive AI spending](https://techcrunch.com/2026/06/01/alphabet-plans-to-raise-80-billion-to-pay-for-ai-buildout/) isn’t worth the money. With the company’s latest earnings report, those investors should be able to relax a little.\n\nThe 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](https://www.bloomberg.com/news/articles/2026-07-22/alphabet-posts-cloud-sales-beat-slight-miss-on-search-revenue)).\n\nThose 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.\n\nThe 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. Meanwhile, Alphabet’s overall revenue grew 24% year-over-year during the past quarter to $119.8 billion. The company also saw Google Services revenue jump 15% to $94.5 billion.\n\n“Our AI investments are redefining what’s possible across every part of our business,” said Google CEO Sundar Pichai during Wednesday’s earnings call. “We have exciting momentum across the board.”\n\nMore people are also adopting Gemini, Google’s AI chatbot, as the app currently enjoys 950 million monthly active users, the company said. In Q4 of 2025, Google [reported that](https://techcrunch.com/2026/02/04/googles-gemini-app-has-surpassed-750m-monthly-active-users/) the app had 750 million users.\n\nIt’s worth noting that spiking revenue isn’t unusual for Google. This marks the company’s 12th consecutive quarter of double-digit revenue growth. But even by that standard, this quarter represents a particularly bountiful period for the tech giant.\n\nAlphabet’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 billion for the year — a fact not lost on analysts during Wednesday’s earnings call. Several pressed Pichai on when, and how much, those investments will pay off.\n\n“I think our compute capacity investments in ’27,” he said. “We are seeing strong demand indicators, including long-term deals,” he continued. “I think, if anything, the dynamics look healthier than where we were about a year ago, so that’s what gives us the confidence to undertake those investments,” he said.", "url": "https://wpnews.pro/news/google-justifies-its-massive-ai-spending-with-a-booming-cloud-business", "canonical_source": "https://techcrunch.com/2026/07/22/google-justifies-its-massive-ai-spending-with-a-booming-cloud-business/", "published_at": "2026-07-22 22:01:52+00:00", "updated_at": "2026-07-22 22:23:14.086156+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure"], "entities": ["Alphabet", "Google Cloud", "Sundar Pichai", "Gemini"], "alternates": {"html": "https://wpnews.pro/news/google-justifies-its-massive-ai-spending-with-a-booming-cloud-business", "markdown": "https://wpnews.pro/news/google-justifies-its-massive-ai-spending-with-a-booming-cloud-business.md", "text": "https://wpnews.pro/news/google-justifies-its-massive-ai-spending-with-a-booming-cloud-business.txt", "jsonld": "https://wpnews.pro/news/google-justifies-its-massive-ai-spending-with-a-booming-cloud-business.jsonld"}}