Alphabet Inc. is the global leader in digital ad revenue and the top search engine in the world, yet its cloud division remains firmly entrenched in third place behind Amazon Web Services Inc. and Microsoft Corp. for market share. Could that picture soon change?

This is one of several key questions surrounding Google Cloud Next, the search giant’s annual gathering that will take place in San Francisco later this month. Google Cloud has pursued a number of initiatives over the past year, and industry observers will be looking for news involving the company’s recent focus on generative artificial intelligence, data security and expansion into new markets.

TheCUBE, SiliconANGLE Media’s livestreaming studio, will be covering the Google Cloud Next event live Aug. 29-31. TheCUBE’s industry analysts will interview key Google LLC executives, customers and partners to learn how the competitive cloud market will evolve as automation and interoperability gain traction in enterprise IT. (* Disclosure below.)

AI-driven profitability

Alphabet’s most recent earnings report in July yielded signs that Google Cloud’s business could be accelerating. The company’s public cloud infrastructure unit delivered a healthy 28% increase in revenue, driven by use of the cloud platform to train generative AI models.

“Google Cloud has demonstrated strong leadership in the Gen AI industry,” said John Furrier, industry analyst for theCUBE. “The company’s Q2 2023 earnings report revealed that over 70% of Gen AI unicorns rely on Google Cloud. This testament of trust from the industry’s fastest-growing startups indicates the robustness and competitiveness of Google Cloud’s AI infrastructure.”

Google Cloud has also swung into new territory as a profitable business. The company reported operating income of $395 million in the last quarter versus a $590 million loss one year earlier, and it’s the second quarter in a row that Google Cloud has been profitable.

Google Cloud’s recent success comes on the heels of a flurry of AI-related announcements. Over the past three months alone, Google Cloud made new tools available in its Vertex AI product suite, debuted a service using AI to help financial institutions detect money laundering and unveiled an expanded partnership with Cohesity Inc. to leverage AI for data security and management.

Behind Google’s recent moves in the cloud space can be found a guiding principle in its approach. The company wants to place AI at the center of the overall cloud experience.

“It’s changing how developers interact with the cloud platform, making it more human centric, goal oriented and holistic, said Richard Seroter, director of outbound strategy and enablement at Google Cloud, during one of the company’s recent announcements. “This isn’t just for developers, though. It works if you’re a developer, operator, security professional, frankly even if you’re someone who doesn’t know how to code. We’re trying to help people do their jobs with more confidence, ease and even enjoy themselves.”

Strengthening security

Seroter’s mention of security was not a casual aside. Google Cloud has been focused on bolstering data protection defenses through a series of announcements this year. In early May, DevSecOps company GitLab Inc. announced expansion of its Google Cloud partnership to provide GenAI features that enable developers to maintain security and privacy standards. Google’s cloud unit also recently introduced an API abuse detection dashboard to identify business logic attacks that are notoriously hard to find and defend against.

Google Cloud recently incorporated a dedicated large language model into its Security AI Workbench offering. The new feature, Sec-PaLM, is being used by Google to address an increasing number of threats by analyzing and explaining the behavior of potentially malicious scripts in code. It demonstrates how the intersection of generative AI and security is transforming the way enterprises can protect critical data in the cloud.

“It can identify malicious code and understand what it is doing, even if it has never seen it before,” said Eric Doerr, vice president of engineering for Google Cloud Security, in an interview with SiliconANGLE. “Generative AI can look at it and analyze what’s going on with that attack path and suggest things to do immediately.”

Seeking new markets in Web3

Google Cloud has been seeking new markets and one clearly involves the world of Web3, the decentralized web that allows for peer-to-peer transactions using blockchain technology. Despite the turmoil in cryptocurrencies, regulatory pressures and questions surrounding the blockchain’s viability, Google Cloud continues to be an active participant in the Web3 space.

In April, Google Cloud announced that it was broadening its outreach to Web3 blockchain startups by including Web3-specific benefits in its Google for Startups Cloud Program. The benefits include cloud credits up to $200,000 over two years and access to products such as Blockchain Node Engine and BigQuery public datasets that include cryptocurrencies, such as Bitcoin and Ethereum.

Google Cloud has a dedicated team specifically focused on Web3 technologies, and the focus in recent months has been on expanding its partnership base in the ecosystem. Google formed alliances with several other blockchains, such as Solana and Aptos, and partnered with the cryptocurrency exchange Coinbase Global Inc. to run applications and payments on Google Cloud. The cloud unit’s participation in the decentralized web can be seen as an opportunity to open new doors for working with clients in financial services and gaming, along with a potential broader market expansion as Web3 adoption grows.

“As an infrastructure provider, Google Cloud views the evolution of blockchain technology and decentralized networks today as analogous to the rise of open source and the internet 10 to 15 years ago,” Yolande Piazza, vice president of financial services at Google Cloud, said during the launch of the unit’s dedicated Web3 team. “As the technology becomes more mainstream, companies will need scalable, secure infrastructure on which to grow their businesses and support their networks.”

In the end, it all comes back to AI. As demonstrated by Google’s most recent earnings, the company’s cloud business is experiencing a tailwind, driven by its strong position within the open-source community and a tidal wave of enterprise interest in AI.

“When it comes to open source, Google has been instrumental to many advances in the industry,’ Furrier noted. “Now with AI exploding in open source, Google is winning share in what we call the ‘AI Supercloud.’ Google is poised to capture share and positioned to be the developer cloud for the AI fastest-growing startups and enterprises. Google could well be the AI supercloud leader if this AI growth continues.”

TheCUBE event livestream

Don’t miss theCUBE’s coverage of Google Cloud Next from August 29-31. Plus, you can watch theCUBE’s event coverage on-demand after the live event.

How to watch theCUBE interviews

We offer you various ways to watch theCUBE’s coverage of Google Cloud Next, including theCUBE’s dedicated website and YouTube channel. You can also get all the coverage from this year’s events on SiliconANGLE.

TheCUBE Insights podcast

SiliconANGLE also has podcasts available of archived interview sessions, available on iTunes, Stitcher and Spotify, which you can enjoy while on the go.

SiliconANGLE also has analyst deep dives in our Breaking Analysis podcast, available on iTunes, Stitcher and Spotify.

Guests

Stay tuned for theCUBE’s lineup of guests, as we’ll be talking with executives, industry analysts and organizations at the forefront of cutting-edge technology.

(* Disclosure: TheCUBE is a paid media partner for Google Cloud Next. Neither Google, the sponsor of theCUBE’s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)

Image: SiliconANGLE