‘The growth we’re seeing across [Google] Cloud is underpinned by the benefit AI provides for our customers,’ Ruth Porat, president, chief investment officer and CFO, said during Google parent Alphabet’s first-quarter 2024 earnings call Thursday.

Google parent Alphabet credited its strong first fiscal quarter of the year to solid Google Search and Google Cloud revenue.

For the first quarter of 2024 ended March 31, Google Cloud, the world’s third largest cloud computing company, generated $9.57 billion, up an impressive 28 percent from $7.45 billion a year ago.

Google CEO Sundar Pichai said that cloud business continues to grow as the company brings the best of Google artificial intelligence to enterprise customers around the world.

“Our differentiation in cloud begins with our AI Hypercomputer, which provides efficient and cost-effective infrastructure to train models. Today, more than 60 percent of funded GenAI startups and nearly 90 percent of GenAI unicorns are Google Cloud customers,” Pichai said.

As an example of the momentum the company is seeing in cloud thanks to AI, the Google One offering, which bundles cloud storage, AI capabilities and other Google features in one shareable plan, has crossed more than 100 million paid subscribers. In the first quarter, Google also recently introduced a premium AI plan called Gemini Advanced.

[Related: Google Cloud ‘Applying AI To Our Whole Partner Incentive Portfolio:’ Google Exec]

Google during its first-quarter 2024 earnings call Thursday pointed to popular brands such as Beyer, Mercedes Benz and Walmart that are seeing generative AI success with Google Cloud, Pichai said.

The company over the past eight months has launched more than 1,000 new products and features as part of the Google Cloud Platform.

Google Cloud was not profitable until the company reported in first-quarter 2023 that the segment had generated $191 million in operating income. Prior to that, the company was investing billions each quarter to expand its global cloud infrastructure and services reach.

Google Cloud generates its sales from the Google Cloud Platform, platform services, infrastructure and collaboration tools such as Google Workspace. It takes in revenue primarily from consumption-based fees and subscriptions from Google Cloud Platform services, Workspace tools and other services.

Ruth Porat, the company’s president, chief investment officer and CFO, said that Google Cloud’s performance during the first quarter reflects strong demand for Google Cloud Platform infrastructure and offerings, as well as for Google’s Workspace productivity tools.

“The growth we’re seeing across cloud is underpinned by the benefit AI provides for our customers. We continue to invest aggressively while remaining focused on profitable growth,” she said.

Gemini, Google’s AI-powered agent, is built into Google Workspace tools, including Gmail, Docs and Sheets. Google recently introduced Gemini for Meetings and Messaging and Gemini for Workspace security.

“Customers are choosing Workspace because they have deep trust in our powerful security and privacy features. Our cloud business is now widely seen as the leader in cybersecurity,” Pichai added.

Google announced earlier this month that it would be consolidating the teams that focus on building AI models across Google Research and Google DeepMind in a move the company said would “further accelerate progress in AI.”

Google Cloud, which delivered operating income of $900 million during the quarter, accounted for nearly 12 percent of Google’s total revenue of $80.54 billion in first-quarter 2024.

Google bested Wall Street expectations of $78.59 billion during its first fiscal quarter of the year. The company also beat Wall Street’s expectations for YouTube advertising revenue and cloud revenue.

Parent Alphabet’s stock climbed more than 12 percent in after-hours activity on news of the earnings results.