As first-quarter revenue for Google Cloud surged 63 percent from a year ago, ‘it’s clear that our AI investments and full‑stack approach are driving performance across our business,’ Alphabet and Google CEO Sundar Pichai said during the company’s quarterly call Wednesday.
Google Cloud’s massive investments into AI and cybersecurity—including through the company-record $32 billion acquisition of Wiz—are driving major revenue momentum, Alphabet and Google CEO Sundar Pichai said Wednesday.
Strong initial results from cloud and AI security provider Wiz and growth in Gemini Enterprise subscriptions were among the highlights of the first quarter of the year for Google Cloud, which disclosed financial results for the period ending March 31 on Wednesday.
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“It’s clear that our AI investments and full‑stack approach are driving performance across our business,” Pichai said during the company’s quarterly call with analysts.
Google Cloud revenue for the first quarter jumped to $20.02 billion, up 63 percent year-over-year, with demand climbing for core Google Cloud Platform (GCP) offerings as well as for enterprise AI services and infrastructure, the company said.
Additionally, because Google Cloud is “compute-constrained in the near-term,” the company’s “cloud revenue would’ve been higher if we were able to meet the demand,” Pichai said.
In terms of AI growth, Pichai pointed to “tremendous momentum” for Gemini Enterprise, with growth of 40 percent in paid monthly active users for Q1 compared to the prior quarter sequentially.
On the whole, “Google Cloud is differentiated because we are the only provider to offer first-party solutions across the entire enterprise,” he said. “Our growth in revenue, operating margin and backlog highlights this differentiation. Our enterprise AI solutions have become our primary growth driver for cloud.”
The first quarter saw that revenue from products built on Google’s GenAI models surged “nearly 800 percent year over year,” Pichai said.
The addition of Wiz, which is reporting revenue within the Google Cloud segment, was another top highlight of Q1, according to Pichai.
Following the completion on March 11 of the $32 billion Wiz acquisition—which was also a record-high amount for a cybersecurity acquisition—the new Google Cloud subsidiary has quickly proven itself to be “an incredible fit for the moment we are in” with its offerings in cloud and AI security, he said.
“The performance of Wiz so far has exceeded our expectations,” Pichai said. “Together with Google’s threat intelligence, security operations and AI models, Wiz is helping organizations detect, prevent and respond to threats.”
In total, Alphabet generated revenue of $109.89 billion during the first quarter, rising 22 percent year-over-year and surpassing the Wall Street analyst consensus estimate by $2.87 billion.
