Google Cloud holds $106 billion in orders, with an additional $58 billion in revenue expected before 2027
Google Cloud has signed unfulfilled customer contracts amounting to $106 billion, with an expected revenue conversion of $58 billion over the next two years. CEO Thomas Kurian stated that the growth rate of contract commitments exceeds the revenue growth rate, indicating an expansion in the scale of unfulfilled contractual obligations. Google Cloud has advantages in AI infrastructure and generative AI models, and although its market share lags behind Amazon and Microsoft, it is still regarded as a strong growth engine for Alphabet
According to the Zhitong Finance APP, Thomas Kurian, CEO of Google Cloud, a subsidiary of Alphabet Inc. (GOOGL.US), revealed that the total committed amount in existing customer contracts signed but not yet fulfilled by Google Cloud has reached $106 billion. Kurian stated on Tuesday that over the next two years, as these services are gradually delivered, it is expected that at least 55% (i.e., $58 billion) of the contract amount will convert into actual revenue for the company. "The growth rate of contract commitments exceeds our revenue growth rate," he added, "which means we are not only achieving revenue growth, but the scale of unfulfilled contractual obligations (remaining revenue to be confirmed) is also expanding."
Currently, technology companies are ramping up data center capacity to meet the growing demand for artificial intelligence (AI) computing power, and Alphabet is one of them.
Kurian made the remarks at the Goldman Sachs Communacopia + Technology conference held in San Francisco. He also shared Google Cloud's strategic thinking in the rapidly expanding cloud computing and AI market, emphasizing that Google Cloud's advantages in AI infrastructure, generative AI models, and data processing capabilities mainly stem from the department's self-developed chip technology and deep software expertise.
Although Google Cloud still lags behind Amazon (AMZN.US) and Microsoft (MSFT.US) in market share in the cloud computing field, ranking third, it is still regarded as one of the strongest growth engines for the tech giant as Alphabet's core search business matures. Thanks to Google's substantial investments in AI and its expertise in this emerging technology field, Google Cloud has successfully attracted numerous customers, especially among AI startup groups, where it enjoys high recognition.
Alphabet's latest financial report released in July showed that in the second quarter of this year, Google Cloud's revenue grew by 32% year-on-year, reaching $13.6 billion. Alphabet CEO Sundar Pichai also mentioned in the report that Google Cloud's annualized revenue run rate has surpassed $50 billion
