Google Revenue Soars to Record as AI Boom Lifts Cloud Business
Google AI cloud revenue
Alphabet Inc. reported record quarterly revenue as its artificial intelligence and cloud businesses powered a surge in profitability, underscoring how AI adoption continues to transform Big Tech’s balance sheets.
The company posted $102.3 billion in third-quarter sales, up 16% from a year earlier, while net income jumped 33% to $35 billion. The results beat Wall Street expectations and sent shares up more than 6% in after-hours trading.
AI Spending and Cloud Growth Fuel Record Quarter
Google’s capital expenditures for 2025 are now expected to range between $91 billion and $93 billion — nearly double last year’s total — as it races to expand AI infrastructure and data centers. The company signaled that spending will continue to climb into 2026 as it scales up facilities to train and deploy its AI models.
The cloud division delivered $15.2 billion in revenue, rising 34% year over year. CEO Sundar Pichai said AI was now “driving real business results across the company,” citing growing enterprise demand for Google Cloud’s AI compute capabilities.
Gemini App and AI Search Push Engagement
Google’s Gemini chatbot and new “AI Mode” search interface have drawn hundreds of millions of users. The company said Gemini now has over 650 million monthly users, with query volume tripling since the second quarter. AI enhancements to Search, YouTube, and productivity tools are helping Google retain its dominant position despite competition from ChatGPT and Perplexity.
The Search division generated $56.6 billion in revenue, up nearly 15%, while YouTube brought in $10.3 billion, a 15% increase over the prior year. Google continues to trim costs across divisions, with new reorganization and voluntary severance programs announced in YouTube and advertising units.
Legal Clouds Lift Slightly as AI Competition Grows
Google notched a partial legal win last month when a U.S. judge stopped short of imposing structural penalties in its antitrust case over search dominance. The decision allows Google to maintain its lucrative search deal with Apple, worth more than $20 billion annually. However, the company still faces separate antitrust cases over its digital advertising technology.
Analysts See AI Flywheel Accelerating
Wall Street analysts said the record quarter and spending forecast demonstrate how Google’s AI investments are beginning to pay off. “We’re seeing Google’s AI ecosystem enter a monetization phase,” one analyst noted, citing rising demand for AI-enhanced cloud infrastructure and productivity tools. Analysts expect Alphabet’s AI-related revenue to make up more than 40% of total sales by 2027.
Despite ballooning costs, Google’s balance between ad strength, cloud leadership, and rapid AI integration puts it in a commanding position for the next phase of the tech cycle.