Alphabet quarterly cloud revenues surpass $10B for first time

Alphabet CFO Ruth Porat said that, for the Google Cloud Platform (GCP) segment, which includes infrastructure and platform services, collaboration tools and other services for enterprises, “revenues were $10.3 billion for the quarter, up 29%, reflecting first significant growth in GCP, which was above growth for cloud overall and includes an increasing contribution from AI. And second, strong Google Workspace growth, primarily driven by increases in average revenue per seat. Google Cloud delivered operating income of $1.2 billion and an operating margin of 11%.”

Among those on the earnings call was Eric Sheridan, a stock analyst with Goldman Sachs, who asked Pichai during a Q&A session how he is seeing AI actually get adopted, implemented, and what it potentially could mean for the strategic positioning of Alphabet’s cloud business.

“If you take a look at our AI infrastructure and generative AI solutions for cloud across everything we do, be it compute on the AI side, the products we have through Vertex AI, Gemini for Workspace and Gemini for Google Cloud, et cetera, we definitely are seeing traction,” Pichai said. “People are deeply engaging with Gemini models across Vertex and AI studio. We now have over 2 million developers playing around with these things, and you are seeing early use cases.”