How AI startups are fueling Google’s booming cloud business

Google Cloud introduced Thursday it has added fast-rising AI coding startups Lovable and Windsurf to its roster of consumers. Each firms have chosen Google Cloud as their major cloud computing supplier, the newest signal of Google’s rising prominence towards bigger rivals AWS and Microsoft Azure.

The offers additionally spotlight Google’s efforts to make its cloud enterprise extra central to the corporate’s future.

Immediately, Google Cloud is overshadowed by bigger opponents like AWS and Microsoft, in addition to Google’s a lot bigger promoting enterprise. However it’s seeing upward momentum.

Google Cloud is among the firm’s fastest-growing enterprise strains. On its final earnings name, Google mentioned its cloud division hit an annual run fee of $50 billion, and cloud chief Thomas Kurian mentioned this week the unit lined up $58 billion in new income over the subsequent two years. Google generated $43.2 billion in cloud companies in 2024 and $33.1 billion in 2023.

Profitable contracts with main AI startups appears to be a big driver of Google Cloud’s development. The division says it now works with 9 out of the ten main AI labs, together with Protected Superintelligence and OpenAI, and 60% of the world’s generative AI startups. Within the final yr, the corporate says it’s seen a 20% enhance within the variety of new AI startups selecting Google Cloud.

Whereas Lovable and Windsurf, which was lately acquired by Cognition, spend comparatively little in comparison with main AI labs or massive enterprises, the guess is that they may grow to be bigger companies sooner or later, and nicely well worth the funding.

Google says the 2 vibe-coding startups use Gemini 2.5 Professional to energy their merchandise, that are additionally run on Google Cloud infrastructure. Google says Windsurf can also be utilizing Gemini fashions in integrations with Cognition’s AI agent, Devin.

The numerous cloud prices of coaching, fine-tuning, and operating AI fashions has offered a significant problem for AI mannequin builders, together with Google DeepMind with its Gemini fashions. Nevertheless it’s been a boon for cloud companies. The worldwide cloud market is anticipated to exceed $400 billion in 2025 and develop at a fee of 20% over the subsequent 5 years, in keeping with the market intelligence and analytics agency Synergy Analysis.

The corporate on Thursday hosted its first Google AI Builder’s Discussion board, during which it introduced collectively tons of of AI startup founders and introduced greater than 40 new AI startups constructing on Google Cloud. Along with Lovable and Windsurf, Sequoia-backed Manufacturing facility AI and Andreessen Horowitz-backed Krea AI had been among the many clients named.

A part of the rationale so many AI startups work with Google Cloud are the beneficiant offers it provides. Lots of the AI startups Google works with began on its Google for Startups Cloud Program, during which it provides $350,000 in cloud credit. Google Cloud additionally provides a devoted cluster of Nvidia GPUs for startups within the Y Combinator accelerator program.