TLDR: Alphabet CEO Sundar Pichai announced that nearly all generative AI unicorns are leveraging Google Cloud, highlighting its critical role as foundational infrastructure for the burgeoning AI economy. This revelation came during Alphabet’s strong Q2 2025 earnings call, which saw significant growth across its core segments, particularly in Google Cloud, driven by accelerating AI demand.
Alphabet CEO Sundar Pichai recently underscored Google Cloud’s commanding position in the generative artificial intelligence (AI) sector, stating that ‘nearly all Gen AI unicorns use Google Cloud.’ This assertion, made during Alphabet’s Q2 2025 earnings call, positions Google Cloud as a pivotal infrastructure layer for the rapidly expanding generative AI economy.
The second quarter of 2025 proved to be a ‘standout quarter’ for Alphabet, as described by Pichai, marked by double-digit revenue growth across its primary segments and a notable acceleration in AI momentum. The company’s strategic transformation into a full-stack AI powerhouse is becoming increasingly evident, with AI integrations permeating nearly every facet of its ecosystem, from Search to Cloud, YouTube to Workspace.
Google Cloud emerged as a particularly strong performer, now boasting an impressive $50 billion annual revenue run rate. The unit has experienced significant acceleration in enterprise demand, with deals exceeding $250 million doubling year-over-year. Furthermore, the number of new Google Cloud Platform (GCP) customers saw a nearly 28% increase quarter-over-quarter. Pichai emphasized that not only generative AI unicorns but also leading research laboratories such as SAFE Superintelligence and Physical Intelligence are relying on Google Cloud’s robust infrastructure. This widespread adoption is attributed to Google’s comprehensive and differentiated stack, which includes custom Tensor Processing Units (TPUs), Graphics Processing Units (GPUs), and optimized AI software like PyTorch and JAX.
AI’s positive impact extends beyond Google Cloud, influencing other core areas of Alphabet’s business. Search, for instance, recorded double-digit growth, bolstered by innovative features like AI mode and AI overviews. These AI integrations are actively reshaping user interactions with Google, with AI overviews alone contributing to a 10% increase in global usage and reaching over 2 billion monthly users across more than 200 countries and territories.
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To meet the escalating demand from cloud customers and support its ambitious AI initiatives, Alphabet has significantly increased its capital expenditure outlook for 2025 to $85 billion, up from an initial $75 billion. The company’s cloud backlog has surged to $106 billion, indicating sustained high demand. CFO Anat Ashkenazi noted that while Alphabet is working diligently to increase capacity and improve server deployment, a tight demand-supply environment is anticipated to continue into 2026. Pichai reiterated that ‘AI is positively impacting every part of the business,’ expressing excitement about driving growth in subscriptions through AI offerings and observing significant traction, particularly in the last quarter. Alphabet’s ‘full-stack approach’ to AI encompasses infrastructure, models, tooling, and various products and platforms, solidifying its role as both the interface and the engine of the AI economy.
