Google Cloud CEO: Customers’ actual spending was 50% higher than the contract commitment, and cloud business performance significantly exceeded expectations
Special topic: Focus on the second quarter financial report of US stocks in 2026 Cloud CEO Thomas Kurian said in an interview on Thursday that the actual payment scale of existing customers is about 50% higher than the pre-signed commitment amount. This factor helped Google Cloud's revenue surge by 82% year-on-year, achieving explosive growth. Shares of Alphabet, the parent company of Google, fell on Thursday as investors worried about companies ramping up spending on artificial intelligence. Thomas Kurian, head of Google Cloud, said that actual spending by existing customers on Google Cloud products was about 50% higher than the contracted purchase amount, which was an important driver of the explosive growth of cloud business in the second quarter. Kurian was a guest on Jim Cramer's show on Thursday and said: "After existing customers sign contracts for purchase, they generally further increase their actual expenses, and the actual expenses are about 50% higher than the agreed amount. This is due to the differentiated advantages of our product matrix and the efficient execution of landing sales. This is confirmed by the double growth in revenue and operating profit." Previously, Google parent company Alphabet released its second-quarter financial report on Wednesday. Google Cloud revenue surged 82% year-on-year, driving overall revenue to be better than market expectations. The current demand for Google Cloud services is extremely strong, and the company plans to rent computing power from third-party manufacturers to fill the capacity gap, which will benefit emerging cloud service providers such as CoreWeave and Nebius, and the stock prices of the two companies rose in response. Kurian admitted that renting third-party computing power will drag down profit margins in the short term, but this move is essential. Not only can it absorb the strong demand, such customers will also purchase more of Google's other supporting services in the future. "In the short term, in the next few quarters, we will rent external computing power to meet demand, retain customers first, and then complete the undertaking when our own self-built production capacity is sufficient. Long-term returns will continue to grow with compound interest, and the overall investment return is reasonable." Alphabet raised its full-year capital expenditure cap to $205 billion, sparking market anxiety about huge investment in AI and sending its stock price down more than 7% on Thursday. The company's latest expected capital expenditure range for 2026 is US$195 billion to US$205 billion, compared with the previous quarter's guidance of US$180 billion to US$190 billion; capital expenditures in the second quarter reached US$44.9 billion, with the vast majority invested in AI computing infrastructure. Major technology companies continue to spend heavily to lay out AI infrastructure, and at the same time continue to demonstrate to Wall Street that such long-term investments will eventually pay off. Before the release of Alphabet’s financial report, the market estimated that U.S. technology giants’ total AI-related investment for the year would be approximately US$725 billion; as , Metaverse platform Meta will release financial reports next week, and the industry's overall AI spending estimates are likely to continue to increase. Kurian defended Google's highly restrained capital expenditure strategy and said that many companies have reaped tangible benefits from implementing Google's AI solutions. After implementing our AI system, the unit price of consumers has increased significantly; Macquarie Bank has greatly reduced the processing time of a large number of business processes with the help of process automation. "