Sundar Pichai’s big bet begins to pay off, and YouTube may soon fall behind

Once lagging behind, Google Cloud has surged as a key revenue driver for Alphabet, reaching $15 billion in Q3 2025.

Once seen as a distant third in the cloud wars, Google Cloud has quietly become one of Alphabet’s fastest-growing businesses, fuelled by the AI boom and CEO Sundar Pichai’s long-term vision. What was once considered a costly experiment is now threatening to overtake YouTube as Alphabet’s second-largest revenue engine after Search.

CEO Sundar Pichai's focus on AI and strategic leadership under Thomas Kurian have propelled its growth and market competitiveness. (Bloomberg)

By Ayushmann Chawla

Ayushmann Chawla is the Deputy Chief Content Producer at Hindustan Times. A seasoned tech journalist with years of experience working for some of the industry’s leading media organizations, his articles can also be read on Live Mint. His passion extends beyond journalism—he’s a dedicated automobile enthusiast, always ready to explore the latest in car technology and design. A self-confessed gadget lover, Ayushmann finds joy in testing new devices and sharing his findings with his audience. Instagram: ayushmannchawla

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Alphabet reported $15 billion in cloud revenue for the third quarter of 2025, up 34% year-on-year, driven by demand for AI infrastructure, data centres and Google’s in-house Gemini AI model. “Google Cloud is one of the most important priorities for Alphabet,” Pichai told Reuters earlier this month, noting that the division’s role will only grow stronger in the company’s next phase.

The two bets Pichai made in 2019

When Pichai took over as CEO in 2019, he identified YouTube and Google Cloud as his two big bets to diversify Alphabet beyond advertising. YouTube became a global entertainment juggernaut. Google Cloud, meanwhile, bled billions from 2018 to 2022 before turning its first profit in 2023.

Now, with the rise of generative AI, Pichai’s patience seems to be paying off. Google Cloud’s market share has nearly doubled under Thomas Kurian, the former Oracle executive who took charge in 2018. According to Synergy Research Group, it now holds about 13% of the global market, narrowing the gap with Microsoft Azure (20%) and Amazon Web Services (30%).

The ‘un-Googling’ of Google Cloud

Kurian’s turnaround strategy involved what insiders call an “un-Googley” shift, from a loose, engineering-first culture to one focused on accountability and client satisfaction. He trimmed costs by opening offices in North Carolina and Poland, revamped sales to focus on industries, and renegotiated internal deals that had overcharged the division.

A major turning point came when Pichai handed control of Google’s TPU (Tensor Processing Unit) chips to the Cloud unit in 2022. That move allowed Kurian to sell Google’s AI hardware directly, even to competitors.

Today, nine of the world’s top ten AI labs, including OpenAI, Anthropic and Safe Superintelligence, run workloads on Google Cloud. Anthropic alone has committed to one million TPUs, a deal worth tens of billions.

For Pichai, the message is clear: the cloud bet has finally come good, and YouTube may soon have a company at the top.