Google Cloud has forecasted about $58 billion in revenue commitments over the next two years, signalling the growing importance of the division to Alphabet’s future strategy as AI transforms the tech industry.
The cloud unit, which recently surpassed a $50 billion annual run rate, disclosed the figure at the Goldman Sachs Communacopia + Technology Conference, Reuters reported.
Google Cloud’s chief executive officer, Thomas Kurian, said roughly 55% of the $106 billion sales backlog is expected to convert into revenue within two years, excluding potential new contracts.
Kurian added that the customer pipeline is expanding rapidly, with a 28% quarter-on-quarter increase in new clients. Among them are nine of the world’s 10 largest AI research labs, including OpenAI and Anthropic, despite their direct competition with Google’s own AI products.
While cloud computing contributed only 14% of Alphabet’s overall revenue last quarter, it remains one of the fastest-growing segments, outpacing the company’s advertising-driven core search business.
In its July earnings update, Alphabet said Google Cloud revenue rose 32% in Q2, reaching $13.6 billion. The company has also boosted its capital expenditure plans for 2025 to $85 billion, up from $75 billion, citing rising cloud infrastructure demand.
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