Alphabet’s Google Cloud announced on Tuesday that it expects to generate roughly $58 billion in new revenue over the next two years, reinforcing its ambition to become a central pillar of the tech giant’s future growth.
During its July earnings report, the company revealed that Google Cloud had surpassed a $50 billion annual revenue run rate, reflecting strong momentum across its portfolio. At the Goldman Sachs Communacopia + Technology conference, Google Cloud CEO Thomas Kurian highlighted that the division’s backlog of unrecognized sales contracts is expanding even faster than its recognized revenue, signaling continued demand and growth potential.
Kurian noted that about 55% of the $106 billion backlog is expected to convert into revenue within two years. Importantly, this figure accounts only for existing commitments and does not include potential revenue from new contracts or customers the unit anticipates acquiring. He also reported a 28% quarter-over-quarter increase in new customers, emphasizing the rapid adoption of Google Cloud services.
The unit has secured business with nine of the ten largest artificial intelligence laboratories worldwide by size, including some that compete with Google’s own AI projects, such as OpenAI—the maker of ChatGPT—and Anthropic, which recently reached a $183 billion valuation. This underscores Google Cloud’s growing influence across the AI sector.
Despite cloud computing representing just 14% of Alphabet’s total revenue last quarter—significantly less than advertising generated through Google Search—it is one of the company’s fastest-growing segments. The growth comes as the tech industry seeks to prove to Wall Street that AI can deliver returns that justify its substantial investment. Google Cloud’s position is particularly advantageous as the company’s core search business explores monetization of AI-powered interfaces while navigating regulatory challenges in the U.S. and Europe, which could potentially benefit competitors.
Alphabet CEO Sundar Pichai cited strong cloud demand as the key driver behind the company’s decision in July to raise its 2025 capital expenditure plans from $75 billion to $85 billion, reflecting confidence in the division’s ability to fuel sustained growth.
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