Google Cloud surpassed $20 billion in quarterly revenue for the first time during the first quarter of 2026, according to TechCrunch.
The Alphabet-owned division saw a 63% increase in revenue compared to the same period last year. This growth was primarily propelled by massive demand for generative AI solutions and infrastructure.
Products built on Google’s generative AI models grew nearly 800% year-over-year, the outlet reported. Additionally, Google Gemini Enterprise revenue increased 40% quarter-over-quarter.
Capacity constraints limit growth
Despite the blowout earnings, Alphabet CEO Sundar Pichai warned that supply limitations are hindering even faster expansion. During the Q1 2026 earnings call, Pichai pointed to rising demand for data centers and TPU hardware as a primary driver of recent performance.
"Strong demand" for Gemini Enterprise and various AI solutions drove the recent surge, Pichai told analysts on Wednesday.
The company’s backlog of work doubled during the quarter, reaching $462 billion. This backlog reflects a significant gap between customer interest and available cloud capacity.
Google is also seeing a surge in large-scale enterprise commitments. The number of deals valued between $100 million and $1 billion doubled year-over-year, and the company secured multiple deals exceeding $1 billion.
Customer usage is also scaling rapidly. AI token growth via Google's API reached 16 billion tokens per minute, up from 10 billion tokens per minute in the previous quarter. Customers also outpaced their initial service commitments by 45% quarter-over-quarter.
