Pichai says Cloud is giving up near-term revenue to secure compute for frontier AI

In a podcast interview reported on October 21, 2026, Alphabet CEO Sundar Pichai said the Cloud unit is knowingly forgoing some short-term revenue to free up scarce computing capacity for frontier model development, and that DeepMind's compute needs take priority over other businesses. He said new 2027 Cloud capacity requests would be very hard to meet, and that Gemini 4 Argon was already capacity-constrained after processing nearly 25 trillion tokens in its first 72 hours. He did not quantify the revenue being given up, so the financial cost of this choice remains unclear to outside investors.

1. Pichai said Google Cloud is forgoing short-term revenue to make compute trade-offs supporting frontier AI development (Big Technology Podcast, reported October 21, 2026).
2. Pichai called DeepMind's access to enough compute for cutting-edge model development non-negotiable.
3. Pichai said accommodating new 2027 Cloud capacity requests would be incredibly difficult.
4. Gemini 4 Argon reportedly processed nearly 25 trillion tokens in its first 72 hours, about three times Gemini 3's initial usage.
5. Pichai did not disclose how much Cloud revenue is being forgone.
6. Google Cloud revenue rose 82% to $24.8 billion in the second quarter; contracted backlog was nearly $514 billion.