Google Cloud CEO Thomas Kurian said Alphabet NASDAQ: GOOG is seeing accelerating enterprise demand for its cloud infrastructure, artificial-intelligence products and cybersecurity offerings, citing growth in customer additions, large contracts and cross-selling across its product portfolio.
Speaking at a company conference, Kurian said Google Cloud has more than 17 product lines with annual revenue above $1 billion. He said new-customer acquisition has grown more than twofold year over year, while deals exceeding $100 million have increased more than twofold both quarter over quarter and year over year.
Kurian said customers that make commitments to Google Cloud typically spend more than 50% above their initial commitments, which he said reflects adoption and expansion within the existing customer base.
Integrated AI Stack
Kurian emphasized Google Cloud’s strategy of offering first-party products across the technology stack, including its own tensor processing units, or TPUs; NVIDIA GPUs; Arm-based processors; Gemini models; data-management tools; security products; and enterprise applications such as Workspace.
“Some people buy us for silicon, some people use our models, some people use our data platforms,” Kurian said, describing a business model designed to capture revenue through multiple channels as AI monetization evolves.
He said the company offers what it characterizes as 2.7 times better price performance for AI training, 80% better price performance for inference and 30% better price performance for CPUs. Kurian attributed the economics to Google Cloud’s ability to co-design technology across the stack.
Google Cloud’s accelerator business, including TPUs, is more than twice the size of the next-largest hyperscaler’s TPU business, Kurian said. He added that aggregate payback on AI servers is less than two years, while payback on Google’s own silicon is roughly half that period. Most infrastructure contracts are long-term commitments of about five years, he said.
Gemini Enterprise Adoption
Kurian said Google Cloud’s Gemini Enterprise platform is used by more than 90% of the Fortune 100 and by thousands of smaller businesses. The platform is designed to help companies deploy AI agents that can analyze company data, execute workflows, generate content and assist with security tasks.
According to Kurian, 80% of Google Cloud customers use its AI products. Customers using AI use 1.8 times as many Google Cloud products as those that do not, he said, while the company estimates that the five-year lifetime value of a cloud customer using its Gemini portfolio is 1.5 times higher.
Kurian cited use cases including Signal Iduna’s claims and underwriting analysis, PepsiCo’s supply-and-demand planning, and Macy’s retail-commerce activities. He also described Citigroup’s work on a Gemini Enterprise-based wealth-adviser platform that combines an AI avatar, financial-data analysis, security tools and infrastructure designed for real-time streaming.
Google Cloud differentiates Gemini Enterprise by enabling customers to select different AI models for different tasks, rather than relying on a single model, Kurian said. He argued that using multiple models can be particularly important in cybersecurity, where different models may identify different vulnerabilities.
Cybersecurity and Infrastructure Models
Kurian said Google Cloud’s acquisition of Wiz was driven by the growing ability of AI systems to understand software code and system configurations, potentially making them more effective at finding vulnerabilities.
Wiz helps organizations identify applications, assess risk, prioritize systems for review and find vulnerabilities, he said. Google Cloud has also developed a product called CodeMender with Wiz to repair code and test whether vulnerabilities have been addressed.
“You can only defend a threat from an AI model by using a combination of a security platform and an AI system,” Kurian said. He said more than 90% of the Fortune 100 use Google Cloud’s cyber-defense tools.
On infrastructure deployment, Kurian said Google Cloud offers TPU systems through cloud subscriptions, capital purchases for customer data centers and neocloud offerings. He said the company has established a neocloud with Blackstone.
Providing systems in customer data centers can be important for high-performance computing and capital-markets customers that need infrastructure close to large existing data sets or trading venues, Kurian said. Hardware sales can also reduce Google Cloud’s need to fund data-center space and power for those deployments, he added.
Partner and Industry Focus
Kurian said Google Cloud is using forward-deployed engineers to work with major customers on industry-specific AI applications, build reusable implementation tools, and develop training and certification programs for partners. He said the company recently announced an agreement with Accenture to build a Gemini Enterprise business group.
Going forward, Google Cloud is concentrating its partnership strategy on eight industries, systems integrators and AI specialists, and data providers. In financial markets, Kurian cited data providers including Bloomberg, FactSet and MSCI as examples of firms whose information is available on Google Cloud’s platform for AI-driven analysis.
About Alphabet (NASDAQ:GOOG)
Alphabet Inc NASDAQ: GOOG is a multinational technology holding company headquartered in Mountain View, California. Formed in 2015 through a corporate restructuring of Google, Alphabet serves as the parent to Google LLC and a portfolio of businesses collectively known as "Other Bets." Google was originally founded in 1998 by Larry Page and Sergey Brin; Alphabet is led by CEO Sundar Pichai, who oversees Google and the broader company while the founders remain prominent shareholders and influential figures in the company's history.
Alphabet's core business centers on internet search and advertising, with Google Search and the company's ad platforms (including Google Ads and AdSense) generating the majority of revenue by connecting advertisers with consumers worldwide.
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