Once a money-losing backwater, Google Cloud has become one of Alphabet’s fastest-growing businesses, powered by massive bets on AI and years of costly investment in datacenters, custom chips, and networking gear.

Alphabet’s cloud revenue topped $15 billion in the third quarter, a 34% increase reflecting strong demand for AI infrastructure and services, including Google ’s own Gemini model, the company announced Wednesday.

Google Cloud is now challenging YouTube as Alphabet’s No. 2 cash generator behind its search ads business.

“Google Cloud is one of the most important priorities for Alphabet as a whole and I expect it to play an even more central role as the company moves forward,” Alphabet CEO Sundar Pichai told Reuters in an interview earlier in October.

Much of the cloud unit’s

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