In Q2 2024, Google Cloud achieved a revenue milestone of $10.35 billion, surpassing analyst expectations by 1.47%. This marks a significant increase of over $2 billion, or 29% year-on-year (YoY). The division also reported its first-ever quarter with operating income exceeding $1 billion, specifically $1.17 billion, reflecting an 11% operating margin, up from $395 million in Q2 2023.
During an earnings call, CEO Sundar Pichai and CFO Ruth Porat highlighted the role of Google’s artificial intelligence (AI) infrastructure and generative AI solutions, which have generated substantial revenues and are utilized by over two million developers.
Porat acknowledged a recent reduction in headcount over the past quarters but anticipates a reversal in Q3 with the recruitment of new graduates, particularly focusing on top engineering talent in cloud and technical infrastructure.
Looking ahead, Q3 is expected to reflect operational margins impacted by increased depreciation and expenses associated with higher levels of investment in technical infrastructure, including accelerated hardware launches.
Alphabet’s total capital expenditures (Capex) for Q2 amounted to $13 billion, primarily driven by substantial investments in technical infrastructure such as servers and data centers.
Regarding potential risks associated with AI infrastructure investments, Pichai emphasized that under-investing poses a greater risk than over-investing. He underscored the long-term utility and broad applicability of such investments across various sectors.
In Q2, Google introduced its sixth-generation custom AI accelerator, Trillium, achieving nearly 5x improved peak compute performance per chip and 67% greater energy efficiency compared to its predecessor, TPU v5e. Additionally, Pichai announced the upcoming integration of Nvidia’s Blackwell GPU into Google Cloud by early 2025.
During its partnership with Oracle during the quarter, Google introduced the “Google Cloud Cross-Cloud Interconnect,” enabling customers to deploy general-purpose workloads seamlessly across Oracle and Google platforms without transfer fees. Further collaboration plans include the launch of Oracle Database@Google Cloud in September, leveraging Oracle Cloud Infrastructure’s database services and high-speed network interconnect within Google’s data centers.
Google Cloud’s private, software-defined network provides fast and reliable connections to users in 200+ countries and territories.
The company has its cloud region in Africa in Johannesburg, South Africa.
