For the first time, Google Cloud crossed $20 billion in a single quarter. That’s a jaw-dropping 63% jump from the same time last year. 

But that number could have been bigger. The company is growing so fast that it literally can’t serve all the customers knocking on its door.

The Driver

The first quarter of 2026 was a landmark moment for Google Cloud.

Strong performance in the Google Cloud Platform, which covers data storage, analytics, AI tools, and Google Workspace, pushed results beyond what analysts expected.

AI was the star, however. Products built on Google’s generative AI models grew nearly 800% year-over-year. 

Alphabet CEO Sundar Pichai told analysts on the earnings call that the growth came from “strong demand” for Gemini Enterprise and its AI services. 

He also pointed to surging demand for infrastructure, including custom TPU chips and new data centers.

Google Gemini Enterprise grew 40% quarter-over-quarter. And AI token usage through Google’s API hit 16 billion tokens per minute. That’s up from 10 billion just last quarter.

New Customers 

New customer sign-ups doubled year-over-year, and big deals are getting bigger, too. 

The number of contracts worth between $100 million and $1 billion doubled compared to the same period last year.

Pichai also confirmed that Google signed several deals worth more than a billion dollars each.

Existing customers are spending more than they originally planned. On average, they outpaced their initial spending commitments by 45% quarter-over-quarter. 

The Problem

Despite all this success, Pichai openly admitted that Google Cloud left money on the table.

“Our cloud revenue would have been higher if we were able to meet that demand,” he said during the call.

The company is “compute constrained” right now. Simply put, Google doesn’t have enough capacity to serve every customer who wants access. The demand is outrunning the supply.

Google Cloud’s backlog, essentially orders that haven’t been filled yet, doubled in the quarter to $462 billion. That’s a massive pile of future revenue waiting to be unlocked.

Pichai framed this as a good problem to have. He argued it shows Google Cloud stands apart from its competitors. 

Still, investors weren’t entirely satisfied. They pushed back on how Google allocates its limited cloud capacity among competing business needs.

$462 Billion Backlog

The company expects to work through about half of the backlog over the next 24 months.

To get there, Google is investing heavily. TPU hardware, Google’s custom chips designed for AI workloads, plays a central role. So do new data centers being built around the world.

Pichai said Google uses a return on capital investment (ROIC) framework when deciding where to put its money. The goal is to stay on the cutting edge while making financially smart choices.