Google’s cloud revenue growth has surpassed expectations, with an 82% increase to $24.8 billion in the quarter ended June. This surge in demand for cloud computing services is largely driven by the AI boom, with companies racing to secure cloud capacity for developing, training, and running AI models.

Cloud Growth and AI Investments

As the third-largest cloud services provider behind Amazon Web Services and Microsoft, Google has seen significant demand, landing major deals with firms like Anthropic. The robust cloud growth may alleviate concerns over the company’s substantial AI spending, which includes rapid investments in data centers and advanced chips to build out its AI infrastructure.

While Google Cloud has benefited from the AI boom, the company’s own AI efforts have experienced setbacks, including the delayed launch of its next flagship model, Gemini 3.5 Pro. This has left Google trailing in the AI coding tools market and raised concerns on Wall Street, particularly as competitors like Anthropic and OpenAI continue to roll out enterprise-focused upgrades.

Google’s Search business has emerged as a bright spot, with AI initiatives drawing more advertising dollars. Features like AI Overviews and AI Mode have boosted overall search queries and driven deeper engagement by allowing users to execute longer, conversational searches. Google has capitalized on this strong usage by expanding ads within these AI features.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.