Google CEO: GenAI, Cybersecurity Adoption Driving ‘Real Momentum’ For Cloud Business

Third-quarter revenue for Google Cloud climbed 35 percent from a year ago and ‘the overall opportunity is increasing as customers embrace GenAI,’ Google CEO Sundar Pichai said during the company’s quarterly call Tuesday.

Google Cloud’s aggressive investments into enabling the adoption of AI infrastructure and GenAI capabilities are paying off as the tech giant is finding “real momentum” in the emerging area with customers, Google CEO Sundar Pichai said Tuesday.

A major expansion in generative AI adoption among customers was among the highlights of the third quarter of the year for Google Cloud, which disclosed financial results for the period ending Sept. 30 on Tuesday.

Without a doubt, Google’s “long-term focus on investment in AI are paying off and driving success for the company and for our customers,” particularly when it comes to the Google Cloud business, Pichai said during the company’s quarterly call with analysts.

Google Cloud revenue for the third quarter reached $11.35 billion, up 35 percent year over year, driven by growing adoption of AI-related infrastructure as well as GenAI offerings and “core” Google Cloud Platform (GCP) products, the company said.

Notably, “GCP grew at a rate that was higher than cloud overall” during the quarter, Google CFO Anat Ashkenazi said during the call Tuesday.

“The robust innovation, expanded AI offerings within our cloud business are allowing existing and new customers to realize measurable business benefits, including reduced cost, greater customer engagement, faster response time and better revenue conversion,” Ashkenazi said.

Pichai said during the call that Google parent Alphabet as a whole is “uniquely positioned to lead in the era of AI because of our differentiated, full-stack approach to AI innovation. And we are now seeing this operate at scale.”

And when it comes to Google Cloud specifically, Pichai said Tuesday that “this business has real momentum, and the overall opportunity is increasing as customers embrace GenAI.”

“Our technology leadership and AI portfolio are helping us attract new customers, win larger deals and drive 30 percent deeper product adoption with existing customers,” he said.

Key components behind the surging growth include Google Cloud’s AI infrastructure, through which “we differentiate with leading performance driven by storage, compute and software advances, as well as leading reliability and a leading number of accelerators,” Pichai said.

Another major driver for Google Cloud’s traction is the company’s portfolio of “AI-powered” cybersecurity tools, including Google Threat Intelligence and Google Security Operations, he said.

These offerings are enabling customers to “prevent, detect and respond to cyber security threats much faster,” Pichai said.

As one example of the expanding adoption of Google Cloud’s cybersecurity offerings, “we’ve seen customer adoption of our Mandiant-powered threat detection increase 4X over the last six quarters,” he said.

Ultimately, Google’s approach to AI investment is enabling the company to leverage “best in class efficiency” for itself internally as well as for customers — by way of “what we can provide through cloud,” Pichai said. “And that's reflected in the growth we saw in our AI infrastructure and GenAI services on top of it.”

In total, Mountain View, Calif.-based Alphabet generated revenue of $88.27 billion during the third quarter, climbing 15 percent year over year and surpassing the analyst consensus estimate of $86.33 billion.