I mean, $11B in quarterly operating income ($33B in revenue) is clearly quite a lot. The only reasonable argument here is that this includes hardware sales (i.e. TPUs), but it is still a lot even if you subtract that. I think many folks internalized the narrative that GCP was an also-ran many years ago (when that was demonstrably true), but haven't updated their priors now that revenue is almost the same as (and may soon surpass) Azure's.
Google has spent $132 billion on capex this year. Most of that money is going to GCP. We have to think about the hundreds of billions being invested to contextualize the profit numbers. $40 bill a year is not enough to justify the capex they’re partaking in, GCP still needs to grow a lot to be successful.
I don't think it's correct to view AI capex as simply booking profit for Google Cloud - theoretically almost every aspect of Google's business should indirectly benefit from those investments. Bigger picture though, the bet behind that staggering capex is future profits, not current profits (see: OpenAI, Anthropic). Even if you think that's a stupid bet, the evidence won't be in 2026 income, it'll be in future income.
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