The Google Cloud Next conference in Las Vegas has become a showcase not just for new technology, but for the sheer scale of Alphabet’s ambitions. The message from the tech giant is clear: it is no longer merely renting out computing power—it is building an ecosystem designed to lock in the most valuable customers in the artificial intelligence race. Two blockbuster deals, one with a pharmaceutical heavyweight and another with a high-profile AI startup, underscore how the company is reshaping its cloud business.
On the enterprise side, Merck has committed up to $1 billion to a multi-year agreement that will see the pharmaceutical giant tap into Google Cloud and the Gemini platform. The deal highlights a surge in demand for autonomous AI agents in heavily regulated industries, where compliance and security are paramount. To further bolster its appeal, Alphabet has also launched a $750 million partner fund aimed at accelerating AI development across its ecosystem.
But the conference’s biggest headline came from the startup world. Thinking Machines Lab, the venture led by former OpenAI executive Mira Murati, has signed one of the largest infrastructure contracts in Google Cloud’s history. While the exact figure remains undisclosed, insiders peg the deal at a single-digit billion-dollar amount. The startup will gain access to Google’s infrastructure powered by Nvidia’s new Blackwell architecture, specifically the GB300 servers, which have already demonstrated a doubling of training speed compared to the previous chip generation. This is not an isolated win—Anthropic secured similar capacity earlier this month, and Meta continues to run a multi-billion dollar agreement for Google’s custom TPU chips.
The hardware underpinning these deals is evolving rapidly. Alphabet unveiled its new TPU 8i inference chip, designed for large model workloads with significantly improved energy efficiency. Alongside it came the A5X cloud machines, which combine Alphabet’s own silicon with deepened partnerships with Nvidia, Broadcom, and Marvell. Early demonstrations showed a tenfold speed increase at lower costs compared to the previous generation. The recent acquisition of cybersecurity specialist Wiz has also been integrated into the Google Cloud Platform, providing what analysts describe as a robust protective layer for enterprise clients.
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The market has taken notice. Alphabet’s shares are trading at around €291.45, brushing against their 52-week high. Over the past twelve months, the stock has surged roughly 108%. Several investment banks have updated their outlooks following the conference: BMO Capital Markets raised its price target to $410, Citigroup set a new target of $405, CMSI confirmed its “Overweight” rating with a $390 target, and UBS increased its target from $348 to $375 while maintaining a “Neutral” stance.
Yet the scale of the investment required to sustain this growth is staggering. Alphabet has earmarked up to $185 billion in capital expenditures for the current fiscal year, nearly double the previous year’s spending. The debate on Wall Street has shifted from whether the company can grow to how quickly it can convert these massive outlays into tangible revenue. The cloud segment has already reached an annualized revenue run rate of over $70 billion, but the pace of expansion must accelerate to justify the spending.
All eyes are now on Alphabet’s first-quarter earnings report, due on April 29. Analysts are forecasting revenue in the range of $104 billion to $107 billion, with earnings per share expected between $2.68 and $2.81—slightly below the prior year’s $2.81. The new cloud contracts have filled the order book, but the upcoming report will reveal how much of that demand has already translated into hard revenue. For Alphabet, the next few days will be a critical test of whether its billion-dollar bets are paying off.
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