AI May Actually Make Money, Google's Results Show

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Thomas Smith
May 01, 2026

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AI May Actually Make Money, Google's Results Show

Alphabet (Google’s parent company’s) Q1 2026 results were a blunt reminder that AI is no longer just a product story for Big Tech -- it is a revenue story.

The company said total revenue rose 22% to $109.9 billion, Search revenue grew 19%, and Google Cloud revenue jumped 63% to $20.0 billion. Sundar Pichai said AI experiences are driving Search usage and that Cloud growth is being led by enterprise AI solutions and infrastructure.

That matters because it is the cleanest sign yet that AI can move from demo to durable business engine at platform scale. Alphabet is now saying the same thing three ways -- more Search usage, faster Cloud growth, and rising demand for Gemini-based products -- which is exactly what investors and competitors have been waiting to see. The open question is whether it can keep turning AI usage into demand.

Tom’s Take

There’s an old saying from the 1990s that “Technology is showing up everywhere except the productivity figures.”

Nerdy, I know. But the gist is that the computer tech taking off at the time wasn’t really changing the business world.

Then, over time, of course it changed everything.

People have been watching to see if AI follows a similar path. So far, the tech hasn’t earned much, in the grand scheme of things. Again, as I shared in a previous newsletter, OpenAI’s total revenue is comparable to the $17 billion earned by the pizza delivery industry last year.

Google’s results, though, show that AI might finally be “showing up in the figures” in a meaningful way. If that continues, all the money poured into AI data centers might actually pay off!

Other AI News

  • Microsoft says next-generation AI is speeding up vulnerability discovery and changing the definition of security risk, a useful reminder that better AI also means faster offense and a more demanding defense.

  • Nebius agreed to acquire Eigen AI and fold its inference and post-training optimization stack into Nebius Token Factory, another signal that the inference business is becoming a competition over cost, speed, and unit economics. (nebius.com)

  • Palo Alto Networks said it plans to acquire Portkey to help secure autonomous AI agents, underscoring how quickly AI governance is becoming a standard enterprise security category. (investors.paloaltonetworks.com)