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Google’s AI Exposure Exceeds the $1 Trillion It Reported

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Google’s AI Exposure Exceeds the $1 Trillion It Reported

Google parent Alphabet has said demand for cloud services is rapidly increasing, citing growth in unfulfilled contracts.

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However, a Bloomberg News report Thursday (Oct. 29) points to a quarterly filing from the tech giant saying that upwards of a third of that quarterly growth stems from a joint venture that Alphabet partially owns.

This revelation, the report said, appears in the filing which discussed exposures to artificial intelligence (AI) risk beyond what Alphabet had discussed in its earnings call this week.

During that call, the company disclosed more than $1 trillion in purchase commitments, future leases and other obligations. According to Bloomberg, the filing shows roughly $98.5 billion in contingent commitments Alphabet could be responsible for under certain conditions, an increase of $23 billion from last quarter.

Among those commitments are guaranteeing data center lease payments, supporting partners’ power equipment purchases and a potential requirement to repurchase AI chip systems from customers, the report said.

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Google Cloud’s backlog of contracts came to $560.8 billion at the end of September, compared to $513.9 billion for the proper quarter, Bloomberg said. Of that figure, $16.8 billion is linked to a multiyear agreement with Crux AI, a venture Alphabet formed with Blackstone.

Dan Morgan , senior portfolio manager at Synovus Trust , told Bloomberg that investors view backlog as a key indicator of potential sales growth, but had not fully realized that Google Cloud’s demand came from a firm the company had helped start.


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