Google Annual Revenue Crosses $400 Billion as AI and Cloud Investments Accelerate

Google’s parent company, Alphabet, reported a major financial milestone on Wednesday, with annual revenue exceeding $400 billion for the first time, driven by strong growth in cloud computing and artificial intelligence-related services.

Alphabet said revenue rose 18 percent year-on-year in the latest quarter, reflecting sustained demand for its core search, advertising, and cloud businesses. The company, founded in 1998 by Larry Page and Sergey Brin, posted $113.8 billion in revenue for the final quarter of 2025.

Despite the strong performance, Alphabet signaled that spending will rise sharply as it expands AI infrastructure. The company expects capital expenditures of $175 billion to $185 billion in 2026, nearly double its 2025 investment, as competition intensifies across Silicon Valley.

Chief executive Sundar Pichai said demand for AI services continues to exceed available capacity.
“We’ve been supply constrained even as we’ve been ramping up our capacity,” Pichai told analysts during the earnings call.

Alphabet’s AI-driven cloud business remained a major growth engine. Cloud revenue surged 48 percent to $17.7 billion, while quarterly profit reached $34.5 billion.

The company’s core search and advertising unit continued to generate the largest share of revenue, bringing in $82.3 billion, up from $72.5 billion a year earlier. YouTube advertising revenue also increased to $11.4 billion.

Google’s Gemini AI platform recorded rapid user growth, ending the year with 750 million monthly users, an increase of 100 million from the previous quarter. Industry analysts expect the momentum to continue as AI adoption expands across consumer and enterprise markets.

Alphabet also reported more than 325 million paid subscriptions across services such as Google One and YouTube Premium, strengthening its recurring revenue base.

The cloud division, which competes with Amazon Web Services and Microsoft Azure, has become increasingly central to Alphabet’s long-term growth strategy.

On the legal front, Alphabet continues to benefit from a US court ruling that allowed it to retain ownership of its Chrome browser, despite monopoly-related concerns. The company has, however, confirmed plans to appeal a separate ruling that found it held an illegal monopoly in online search.

While most divisions posted gains, Alphabet’s “Other Bets” segment remained unprofitable. The unit, which includes self-driving car company Waymo, reported a $3.6 billion loss on revenues of $370 million.

Waymo announced this week that it raised $16 billion in a funding round valuing the subsidiary at $126 billion, with Alphabet as the majority investor. The company said it now provides more than 400,000 autonomous rides per week across six major US cities, totaling 15 million rides last year.

Alphabet shares slipped slightly in after-market trading following the earnings release.