Google Cloud reports profitable quarter for the first time in three years

 

What happened: On Apr. 25, Google’s parent company, Alphabet, announced that its Google Cloud business reported its first profitable quarter in three years. The company’s cloud computing division reported an operating income of $191M and $7.45B in revenue in Q1 2023, a 27.5% increase YoY. Despite this growth, Google laid off 12,000 employees this January and introduced a new desk-sharing initiative that was met with resistance from staff.  Why it matters: While Google Cloud still trails far behind Amazon Web Services (AWS) and Microsoft Azure regarding market share, its current profitability could potentially put the company on a trajectory to catch up with the two leading cloud giants. According to Dgtl Infra, in 2022, AWS had 34% of the global cloud market share, followed by Microsoft Azure (22%) and Google Cloud (9.5%). Where to see the impact: Alphabet is investing heavily in AI and Web3, and the company’s improving performance may influence more investments in emerging technologies. However, it is difficult to gauge the long-term impact of the current AI boom on Google’s finances, and only time will tell if the company’s investments will pay off.