Google Cloud's Unfulfilled Contracts Hit $1.06T, 55% to Convert to Revenue

Google Cloud, a division of Alphabet, has announced that it currently holds 1060 billion dollars in unfulfilled customer contracts. The CEO of Google Cloud stated that within the next two years, as these services are progressively delivered, at least 55% of the contract value, amounting to 580 billion dollars, is expected to be converted into actual revenue for the company. This growth in contract commitments outpaces the company's revenue growth, indicating not only an increase in revenue but also an expansion in the scale of unfulfilled contractual obligations.

The tech industry is intensifying its data center capacity to meet the rising demand for artificial intelligence (AI) computing power, and Alphabet is among the leaders in this effort. The CEO made these remarks during a conference in San Francisco, where he also shared Google Cloud's strategic approach in the rapidly expanding cloud computing and AI market. He emphasized that Google Cloud's advantages in AI infrastructure, generative AI models, and data processing capabilities are primarily derived from its proprietary chip technology and deep software expertise.

Despite trailing behind Amazon and Microsoft in the cloud computing market, Google Cloud is seen as one of the most robust growth engines for the tech giant, especially as Alphabet's core search business matures. Benefiting from significant investments in AI and expertise in this emerging technology, Google Cloud has garnered substantial customer support, particularly among AI startups.

In the latest financial report released in July, Alphabet reported that Google Cloud's revenue grew by 32% year-over-year in the second quarter, reaching 136 billion dollars. The CEO of Alphabet also noted that Google Cloud's annualized revenue run rate has surpassed 500 billion dollars.