Alphabet’s AI‑chip sales double Google Cloud revenue but drive cash‑flow loss
Alphabet reported that sales of its custom Tensor Processing Units helped Google Cloud revenue more than double in the September quarter. The rapid build‑up of unsold TPU inventory and heavy data‑center spending pushed free cash flow into the negative. CFO Anat Ashkenazi said the new inventory cycle is draining cash, and the stock fell about 11% after the earnings release.
Why it matters
The negative free‑cash‑flow figure of roughly $9.1 billion signals short‑term liquidity pressure for investors. The sharp revenue growth in Google Cloud shows a new growth engine, but the cash‑flow strain may affect valuation and future spending guidance.
Key facts
- 1Google Cloud revenue rose roughly 103% to $30.7 billion in the September quarter. thenews.com.pk
- 2Free cash flow turned negative at about $9.1 billion for the quarter. thenews.com.pk
- 3Alphabet’s shares fell nearly 11% after the earnings release. investing.com
- 4CFO Anat Ashkenazi said unsold TPU systems are increasing cash outflows. investing.com
- 5Google Cloud chief Thomas Kurian expects TPU sales to rise further this quarter and accelerate in 2027. investing.com
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.