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Google is making money on selling cloud compute. Their margins have gone from 9% to 32%. They're soaking up the investor bonanza into AI - Gemini ain't making
by crowbahr 4mo ago
Google is making money on selling cloud compute. Their margins have gone from 9% to 32%.
They're soaking up the investor bonanza into AI - Gemini ain't making them money.
For context Cloud Compute made 20bn in Q1, Other services made 90bn.
- casualscience 4mo agoSearch, yt, etc.. are the real revenue sources for Google. But they are serving [3.2 quadrillion tokens per month](https://blog.google/innovation-and-ai/sundar-pichai-io-2026/#momentum https://blog.google/innovation-and-ai/sundar-pichai-io-2026/...) and have ramped up a ton in 2026, yet profits continue to expand. Comparing to ad revenue from a company like meta, the story that Gemini tokens are a strong cash drag on Google just doesn't add up. It seems at worst they are losing like 50 cents/1M tokens (including r&d spend, data centers, etc..), and very possible they are actually profitable per token. Which is much better than anthropic and openai.