Google’s parent company Alphabet has reported strong growth in its cloud business, with Google Cloud revenue rising sharply as demand for artificial intelligence (AI) services continues to increase.

According to a Reuters report, Google Cloud revenue jumped 82 percent year-on-year to $24.8 billion, beating market expectations. Alphabet’s total quarterly revenue reached $119.8 billion, higher than analysts’ estimates.

The growth was driven by increasing demand from businesses using Google’s AI infrastructure, cloud services and data tools. Alphabet has been investing heavily in AI technologies to expand its cloud offerings and compete in the growing AI market.

The company also increased its 2026 capital expenditure plans to between $195 billion and $205 billion, mainly to support AI development, data centres and computing infrastructure.

Alphabet CEO Sundar Pichai highlighted the company’s focus on AI-powered products and services, saying the technology is becoming a major growth driver across Google’s ecosystem.

Despite strong cloud growth, investors remained cautious due to higher spending on AI infrastructure and increasing competition in the artificial intelligence sector.