Google’s cloud business turns profitable for the first time on record

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Google CEO Sundar Pichai speaks onstage during the annual Google I/O developers conference in Mountain View, California, May 8, 2018.
Stephen Lam | Reuters

Google has been pouring money into its cloud-computing business to compete with Amazon and Microsoft. Those hefty investments are finally turning a profit.

Alphabet said Tuesday that Google’s cloud business is profitable for the first time in the three years it’s been reporting operating metrics for the division.

The segment generated $191 million in operating income on $7.45 billion in revenue in the first quarter, according to Alphabet’s earnings statement. In the year-ago quarter, the unit reported a $706 million loss on $5.82 billion in revenue.

The cloud business includes the Google Cloud Platform, which rents out cloud infrastructure and services that companies can use to build and run their own applications, as well as Google Workspace productivity software subscriptions. Cloud customers include Deutsche Bank, Major League Baseball, PayPal and UPS.

Google has been vying to win business from big corporations and government agencies that are deciding between major tech vendors as they move from traditional data centers to the cloud and rely on more compute-heavy applications involving artificial intelligence. Amazon Web Services, the leader in cloud infrastructure, popularized the market in the mid-2000s and has been profitable every quarter since 2014. Microsoft, the second-biggest player in the space, doesn’t report profitability figures for its Azure unit.

Alphabet started disclosing cloud revenue in 2020, and the following year began providing information on the scale of its operating losses.

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