In the AI gold rush, the cloud reigns supreme

When Google’s parent company Alphabet reported its latest quarterly results on July 22, investors balked at its negative free cash flow and increased capital expenditures on data centers. But Google is not like OpenAI or Anthropic, both of which are still trying to find a profitable business model as they burn through cash; it remains a cloud-computing giant, and the results of its cloud division for the second quarter were nothing short of extraordinary. Google Cloud’s revenues grew by 82 percent year on year and are now equivalent to 40 percent of the revenues generated by Google Search.