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points by whakim 13 hours ago | 0 comments

I mean, $11B in quarterly operating income ($33B in revenue) is clearly quite a lot. The only reasonable argument here is that this includes hardware sales (i.e. TPUs), but it is still a lot even if you subtract that. I think many folks internalized the narrative that GCP was an also-ran many years ago (when that was demonstrably true), but haven't updated their priors now that revenue is almost the same as (and may soon surpass) Azure's.

[–] HDThoreaun 12 hours ago

Google has spent $132 billion on capex this year. Most of that money is going to GCP. We have to think about the hundreds of billions being invested to contextualize the profit numbers. $40 bill a year is not enough to justify the capex they’re partaking in, GCP still needs to grow a lot to be successful.

[–] whakim 9 hours ago

I don't think it's correct to view AI capex as simply booking profit for Google Cloud - theoretically almost every aspect of Google's business should indirectly benefit from those investments. Bigger picture though, the bet behind that staggering capex is future profits, not current profits (see: OpenAI, Anthropic). Even if you think that's a stupid bet, the evidence won't be in 2026 income, it'll be in future income.

[–] motionlessveloc 10 hours ago

The vast majority of that money is going to AI. Some part of it is for internal consumption, some of it is for resale to GCP customers, but it is not some sort of loss making subsidy to prop up GCP.

[–] HDThoreaun 9 hours ago

All the AI revenue is booked under GCP. This isnt any different from people saying openai and anthropic are selling a dollar for 50 cents