Thomas Kurian, CEO of Google Cloud, speaks at a cloud computing convention held by way of the corporate in 2019.
Michael Trim | Bloomberg | Getty Photographs
Google’s cloud leading Thomas Kurian on Tuesday defined how the tech immense is already monetizing its numerous synthetic logic products and services to generate earnings.
“We’ve made billions using AI already,” mentioned Kurian, talking on the Goldman Sachs Communacopia and Generation Convention in San Francisco.
Kurian mentioned that Google Cloud’s backlog of shopper call for is rising quicker than its earnings.
“Our backlog is now at $106 billion — it is growing faster than our revenue,” he mentioned. “More than 50% of it will convert to revenue over the next two years.”
Right through its most up-to-date 2d quarter, Google mum or dad Alphabet in July reported earnings of $13.62 billion for its cloud computing industry, which was once a 32% building up from the pace prior. Alphabet’s internet source of revenue larger to $28.20 billion, up just about 20% from the former pace. Time Google’s cloud unit lags Microsoft and Amazon’s cloud devices, it’s rising quicker than them.
Right here’s what Kurian mentioned about how Google Cloud is monetizing AI:
Intake
Kurian mentioned some population pay Google by way of intake, giving the instance of AI infrastructure bought by way of endeavor consumers.
“Whether it’s a GPU, TPU or a model, you pay by token — meaning you pay by what you use,” he mentioned. Tokens constitute chunks of textual content {that a} AI fashions procedure after they generate or interpret language.
Some population usefulness customer support methods, paying for it by way of what Kurian referred to as “deflection rates.” Such charges are priced in response to the industry price consumers get — such things as uptime, scalability, AI options and safety.
Google Cloud additionally supplies equipment like a “deflection dashboard,” that buyers can usefulness to trace and govern agent interactions.
Some consumers pay for cloud products and services by the use of subscriptions.
“You pay per user per monthly fee — for example, agents or Workspace,” mentioned Kurian, relating to the corporate’s Gemini merchandise, which has its personal subscription tiers with numerous attic choices, and the Google Workspace productiveness suite, which additionally has a number of subscription tiers,.
Kurian gave an instance of Google Cloud’s cybersecurity subscription tiers, pronouncing “we’ve seen huge growth in that.”
Upselling
Kurian mentioned that upselling is every other key facet of Google Cloud’s technique.
“We also upsell people as they use more of it from one version to another because we have higher quality models and higher-priced tiers,” Kurian mentioned.
He mentioned that when consumers usefulness Google’s AI products and services, they finally end up the use of extra of the corporate’s merchandise.
“That leads customers who sign a commitment or contract to spend more than they contacted for, which drives more revenue growth,” he added.
Kurian says it’s shooting brandnew consumers extra briefly too.
“We’ve seen 28% sequential quarter-over-quarter growth in new customer wins in the first half of the year,” mentioned Kurian, including that just about two-thirds of shoppers already usefulness Google Cloud’s AI equipment in a significant manner.
“Selling to existing customers is always easier than selling to new customers, so it helps us improve the cost of sales,” Kurian mentioned.
