Google Cloud results a profitable sequel, hint to hybrid AI future

Google building

Google Cloud has made profit for two quarters in a row, as revealed in Q2 2023 results from parent company Alphabet.

The hyperscaler finally made profit in the previous quarter, with the period ended June 30, 2023 showing total revenue of $8.03bn for Google Cloud, its highest profit yet at an increase of 27.96 percent year-on-year, 7.7 percent quarter-over-quarter. It bears mentioning though that Google Cloud’s profit represented only 10.8 percent of Alphabet’s total revenue in Q2 2023.

Q2 saw Google Cloud step up on the partnership front, mainly with AI as the powering tech: relationships emerged with the likes of Polygon Labs, Accenture, SAP, Macquarie, Automation Anywhere, UKG, Salesforce, Mayo Clinic, Capgemini, Tata Consultancy Services, Character.AI, Dialpad, Cognizant and Deloitte.

“Generative AI may be the inflection point that propels Google Cloud beyond the #3 position in cloud overall,” Holger Mueller, VP and principal analyst for Constellation Research, tells ERP Today.

“Turning to Google Cloud, we are particularly excited about the customer interest in our AI-optimized infrastructure, our large language models, our AI platform services, and our new generative AI offerings,” Ruth Porat, Alphabet CFO, said in the earnings call.

Alphabet CEO Sundar Pichai also used the success of Google Cloud as a steer for Alphabet’s AI path.

“With cloud… we really embraced open architecture,” said the CEO on the same call. “We have… embraced customers wanting to be multi-cloud when it makes sense for them.

“Similarly, you would see with AI, we will embrace (and) offer not just our first-party models; we’ll offer third-party models, including open-source models. I think open source has a critical role to play in this ecosystem (of which we are) one of the largest contributors to.

“So, we’ll embrace that, and we’ll stay at the cutting edge of technology. And I think that’ll serve us well for the long term.”

Wednesday also saw news that Porat would assume the newly-created role of president and chief investment officer of Alphabet and Google in September.