Enterprise AI is now the primary growth driver for Google Cloud - for the first time

Google Cloud revenue reached $20B in Q1, up 63% YoY. That’s from 28% growth a year ago. GCP is growing faster than any hyperscaler in recent memory.

Enterprise AI is now the main growth lever:

• Revenue from GenAI-model products grew ~800% YoY

• New customer acquisition 2X

• Deals between $100M and $1B doubled YoY, with multiple $1B+ contracts signed.

Existing customers are outpacing their initial commitments by 45% - accelerating over the prior quarter. When customers spend faster than they planned, the product is delivering real value.

Gemini Enterprise is becoming Google’s partner-led AI adoption engine

Sundar Pichai: “Our partner ecosystem plays an increasingly critical role in driving Gemini Enterprise adoption.”

Partner-sold seats grew 9X YoY.

Partners adopting Gemini Enterprise for their own internal use also grew 9x.

This matters, because partners are not just reselling Gemini Enterprise. When partners deploy the product internally first, they sell it better afterward.

Gemini Enterprise paid MAUs grew 40% QoQ.

The usage depth signals are striking:

• 330 GCP customers each processed over 1T tokens in the past 12 months.

• 35 reached 10T tokens.

• Gemini-powered workflows in BigQuery grew 30X YoY.

AI adoption is also pulling security into the stack

Wiz acquisition closed in March and is now reported inside GCP. Sundar said early performance has “exceeded our expectations,” as demand grows for Google’s cybersecurity and AI products.

They also highlighted Gemini-powered agents for threat detection, continuous red teaming and automated remediation.

GCP message: we’re building the secure enterprise AI stack - models, data, agents, infra and security.

CapEx tells you where this is heading

CEO was direct: “We are compute constrained in the near term. Our cloud revenue would have been higher if we were able to meet the demand.”

Q1 CapEx reached $35.7B, up an incredible 107% YoY.

Alphabet raised full-year 2026 guidance to $180–190B, and signaled 2027 CapEx will increase “significantly” again.

Google is now selling TPU hardware directly into select customers’ own data centers - a new revenue stream. Those agreements are already reflected in backlog, though the majority remains typical GCP contracts.

Key takeaways for alliance leaders:

1. 9x partner growth signals Google’s ecosystem-led AI distribution engine is now moving at full speed

2. $462B in backlog => massive commit pools for marketplace transactions. The addressable budget nearly doubled in one quarter.

3. Position your solution as one that drives actual consumption and you’ll earn co-sell attention.

What’s your take on GCP momentum?