‘The fastest adoption of any model in our history’: Sundar Pichai hails AI gains as Google Cloud growth, Gemini popularity surges

Google CEO Sundar Pichai has hailed the company’s growing strength in the AI race after its cloud unit recorded significant financial growth.

Alphabet’s 2025 financial year ended on a bang, with revenue surpassing $400 billion for the first time and Google Cloud revenue reaching $17.7 billion – a 48% increase compared to the same period last year.

Pichai claimed growth in this division is a clear signal of the company’s ongoing success in generative AI.

"Overall, we’re seeing our AI investments and infrastructure drive revenue and growth across the board," he told investors.

Google Cloud has been the tip of the spear for the tech giant in the AI race, leading on the roll-out of its flagship Gemini model range and development of in-house hardware for AI inference.

With Gemini, the growth signals are clear. Pichai revealed Gemini 3 Pro has recorded the “fastest adoption of any model in our history”.

Indeed, the AI app now boasts more than 750 million active monthly users, marking an increase from 650 million in the previous quarter. Pichai also told investors the company secured eight million paid seats for Gemini Enterprise packages in the space of four months.

Google Cloud is gaining ground, albeit slowly

Lee Sustar, principal analyst at Forrester, said Google Cloud’s revenue growth is a key indicator that Alphabet is gaining ground on cloud competitors such as Amazon Web Services (AWS) and Microsoft.

“Google Cloud's quarterly revenue jump of 48% over the same period a year earlier is decisive evidence that it is a full-blown enterprise challenger to AWS and Microsoft Azure,” he said.

The hyperscaler still lags behind AWS and Microsoft both in terms of market share and revenue, however.

Figures from Statista show AWS retains a dominant position in the cloud computing market with a 29% share, but both Microsoft and Google Cloud have been gaining ground in recent years.

Microsoft, Google Cloud’s closest competitor, still dwarfs it in terms of revenue. The tech giant’s recent earnings report shows its cloud unit recorded 26% growth across the quarter and surpassed $50 billion in revenue - nearly three-times that of Google Cloud.

Bullish spending plans

While Alphabet earnings highlight the continued success of its AI and infrastructure push, Sustar noted that growth “comes at a hefty price” as capital expenditure projections soared.

The company plans to spend between $175 billion and $185 billion across 2026, roughly twice what it spent last year and a significant increase on analyst expectations of $115 billion.

Pichai attributed this to supply constraints and future planning, with the company appearing keen to strike while the iron is hot with bullish infrastructure investment.

“We’ve been supply constrained even as we’ve been ramping up our capacity,” he told investors. “Obviously, our capex spend this year is an eye towards the future. We are constantly planning for the long-term.”

Much of this spending will go toward compute capacity to meet the aforementioned constraints, according to CFO Anat Ashkenazi, with around 60% of spending focused on upgrading existing hardware assets and construction of new data center infrastructure.

Google was famously caught off guard by the launch of ChatGPT in late 2022 and had a rocky start following a lackluster product launch with Bard in February 2023.

However, company appears to have cast off initial concerns about its ability to compete with Microsoft and OpenAI.

The launch of Gemini 3 Pro in November 2025 marked a significant turning point for the tech giant. The new flagship model vastly outperformed competitor options such as GPT-5.1 and Claude Sonnet 4.5 on multimodal reasoning benchmarks, for example.

MMMU-Pro testing showed Gemini 3 Pro scored 81% versus GPT-5.1’s 76% and Claude Sonnet 4.5’s 68%.

Hardware is another area in which Google has recorded positive signs. At Google Cloud Next 2025 the company unveiled ‘Ironwood’, its seventh generation TPU that, at the time, offered industry-leading capabilities for AI workloads.

While Google still uses Nvidia hardware across its infrastructure, this has become a notable USP for the company, giving it a degree of flexibility in meeting customer compute demands as well as a buffer against chip supply constraints.

As ITPro reported last year, the tech giant has invested heavily in its TPU range, and previous models including Gemini 2.5 Pro and Gemma 3 were trained using the hardware.

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