Google's cloud computing service, Google Cloud, has become its most important growth engine. CEO Thomas Kurian recently stated at the Goldman Sachs Communacopia + Technology Conference held in San Francisco that the business had generated billions of dollars in revenue through artificial intelligence (AI) services and established diversified business models. Currently, it holds a backlog exceeding US$106 billion, with approximately 55% of these orders expected to convert into revenue within the next two years—about US$58 billion.
According to reports from media outlets including Bloomberg, Reuters, and CNBC, Kurian highlighted that Google Cloud's three major AI business models successfully drove second quarter 2025 revenue to a new high of US$13.62 billion, representing a 32% year-over-year increase.
The first model is consumption-based billing, where enterprise customers pay tokens based on GPU, TPU, or model usage; customer support systems are billed according to problem resolution value.
The second is subscription-based, primarily covering Google Workspace, Gemini products, and personal cloud services like Google One. Additionally, a newly launched "Google AI Ultra" premium subscription offers 30TB of storage and advanced AI features starting at US$249.99 per month. Security-related subscription services have also experienced rapid growth.
The third model is upselling, which encourages customers to upgrade to higher-quality and higher-priced models as their usage expands, driving final spending above original contract amounts and further boosting revenue growth.
It was reported that Google Cloud added 28% more new customers in the first half of 2025, with nearly two-thirds already adopting its AI tools. Kurian noted that the cost of additional sales to existing customers is lower, helping improve profitability.
Currently, nine out of the world's top ten AI labs are Google Cloud customers, including AI startups such as OpenAI and Anthropic.
Recently, Google Cloud secured a six-year cloud contract worth US$10 billion from Meta Platforms, demonstrating its growing competitiveness in the large enterprise market. Although its market share still trails AWS and Microsoft Azure, its growth rate leads the industry.
Although Google Cloud currently accounts for only 14% of parent company Alphabet's total revenue, its performance growth significantly surpasses the core search advertising business and is recognized by the market as Alphabet's next key growth driver.
Alphabet CEO Sundar Pichai pointed out that cloud demand was the main reason the company increased its 2025 capital expenditure forecast from an initial US$75 billion to US$85 billion, underscoring the strategic importance of cloud and AI for the company's future.
Overall, Google Cloud shows strong momentum in AI investment returns, data center construction, and customer expansion, accelerating its approach toward the market-leading positions of AWS and Azure.
Article translated by Charlene Chen and edited by Joseph Chen
