- Evercore ISI projects Alphabet's sales of TPU AI chip systems will generate 35% of Google Cloud computing revenue in 2027.
- Alphabet originally built TPUs for its own cloud workloads and is now selling them to outside customers.
- Google Cloud revenue rose 82% to $24.8 billion in Q2 and operating income reached $8.8 billion, up from $2.8 billion a year earlier.
- Alphabet projects 2026 capital expenditures of approximately $200 billion, with shares falling over 6% on concerns about returns on the raised capex outlook.
- Q2 free cash flow was negative $5.9 billion as property and equipment spending reached $44.9 billion.
Quotes
“Google originally developed Tensor Processing Unit systems, or TPUs, for its own cloud computing workloads.”
“Google Cloud revenue surged 82% to $24.8 billion, and its operating income reached $8.8 billion, up from $2.8 billion a year earlier.”