Alphabet is among tech companies racing to build out data centre capacity in order to serve growing demand for artificial intelligence processing
[NEW YORK] Alphabet’s Google cloud computing division has up to US$106 billion in commitments from existing customer contracts that it has yet to fulfil, according to the division’s chief executive Officer, Thomas Kurian.
At least 55 per cent, or US$58 billion, is expected to turn into revenue earned by the company over the next two years as those services are delivered, Kurian said on Tuesday (Sep 9). “It’s growing faster than our revenue,” he added. “So not only are we growing revenue, but we are also growing our remaining performance obligation.”
Alphabet is among tech companies racing to build out data centre capacity in order to serve growing demand for artificial intelligence (AI) processing.
Kurian made the comments at Goldman Sachs Communacopia + Technology Conference in San Francisco, where he presented insights into Google Cloud’s strategy in the rapidly expanding cloud computing and AI markets. He highlighted the unit’s proprietary chip development and software expertise as Google Cloud’s advantages in AI infrastructure, generative AI models and data processing capabilities.
Despite being in third place behind competing cloud services offered by Amazon.com and Microsoft, Google Cloud is still viewed as one of Alphabet’s strongest sources of growth as the tech giant’s main search business matures. The unit has benefited from Google’s massive spending on AI, and its expertise in the emerging technology has helped Google Cloud score client wins, especially among AI startups.
The cloud division generated revenue that jumped 32 per cent to US$13.6 billion in the second quarter, Alphabet said in its most recent earnings report in July. In that same report, Alphabet CEO Sundar Pichai said that Google Cloud had achieved an annual revenue run rate over US$50 billion. BLOOMBERG
