Thomas Kurian projects at least 55% of US$106 billion commitments will convert by 2027
Google Cloud is on track for a significant revenue surge, with more than half of its existing contract commitments expected to translate into US$58 billion in revenue over the next two years, according to division CEO Thomas Kurian.
Commitments Driving Growth
At the Goldman Sachs Communacopia + Technology Conference in San Francisco on September 9, Google Cloud CEO Thomas Kurian revealed that the company holds US$106 billion in existing commitments, known as remaining performance obligations. At least 55% of this—about US$58 billion—will convert to revenue by 2027, reflecting customer demand outpacing current revenue growth.
Kurian emphasized that the backlog includes only existing contracts and does not account for new customers or deals expected in the near term.
Rising AI and Data Demand
Google Cloud’s expansion is closely tied to surging demand for AI infrastructure and processing power. Kurian highlighted proprietary chip development, software expertise, and strong data processing capabilities as the unit’s competitive advantages. Alphabet has also been scaling up data center capacity to support AI-driven workloads.
Notably, nine of the world’s ten largest AI labs are Google Cloud customers, including rivals such as OpenAI and Anthropic. This underscores the division’s pivotal role in powering next-generation AI research and applications, even from competitors.
Rapid Customer Growth
Kurian reported a 28% increase in new customers quarter-over-quarter, a sign that Google Cloud’s positioning in the market is accelerating. In July, Alphabet CEO Sundar Pichai said the cloud unit achieved an annual revenue run rate of more than US$50 billion, after reporting Q2 revenue of US$13.6 billion, a 32% year-on-year increase.
Despite accounting for just 14% of Alphabet’s overall revenue, Google Cloud remains one of its fastest-growing divisions, standing in contrast to Google’s ad-centric search business, which continues to face regulatory scrutiny in the US and Europe.
Strategic Capital Investment
Alphabet’s growing reliance on cloud services has influenced its broader financial strategy. In July, the company raised its 2025 capital expenditure forecast from US$75 billion to US$85 billion, attributing much of the increase to cloud infrastructure demand.
This investment signals Alphabet’s determination to position Google Cloud not only as a revenue engine but also as a critical foundation for future AI-driven services across industries.
Google Cloud’s projected US$58 billion revenue boost highlights its transformation into a central pillar of Alphabet’s future growth. As AI adoption accelerates and competition intensifies, the unit’s strong contract pipeline and expanding customer base position it at the forefront of global cloud computing and artificial intelligence markets.
Sources: The Malaysian Reserve (2025) , Reuters (2025)
Keywords: Google Cloud, Revenue Forecast, Alphabet, Cloud Computing, AI Growth, Technology Expansion
