Alphabet Begins Recognizing Revenue From TPU Systems as Google Cloud Backlog Reaches $513.9 Billion
Google Cloud began recognizing TPU system sales in the quarter ended June 30, while TSMC described rising demand for AI capacity and advanced packaging.
Alphabet has begun recognizing revenue from tensor processing unit systems, expanding beyond providing TPU access through Google Cloud as the segment carries a $513.9 billion revenue backlog.
Google Cloud began recording TPU system sales in the quarter ended June 30. Revenue increased by $11.1 billion from a year earlier, while Alphabet expects to recognize slightly more than 50% of its total Google Cloud backlog over the following 24 months.
“Q2 was an amazing quarter, with Alphabet revenues growing 24% year-over-year and Google Cloud revenues accelerating to 82% growth, driven by demand for AI infrastructure and AI solutions,” CEO Sundar Pichai said.
Alphabet generated $39.1 billion in operating cash flow during the quarter and spent $44.9 billion on capital expenditures, implying approximately $5.8 billion in negative free cash flow before adjustments. Capital expenditures totaled $80.6 billion during the first six months of 2026.
Taiwan Semiconductor Manufacturing Co. is also expanding capacity as demand for AI-related computing increases. Chairman and CEO C.C. Wei said, “The most important reason is because that demand continues to increase.”
TSMC is expanding advanced packaging capacity, including CoWoS, as part of its AI-related investment. The company recorded $40.20 billion in second-quarter revenue and forecast third-quarter revenue between $44.6 billion and $45.8 billion.
The disclosures do not establish that TSMC’s packaging capacity is limiting Alphabet’s TPU deliveries or confirm that TSMC is Alphabet’s key supplier for the systems. TSMC also has not disclosed that CoWoS capacity is sold out through 2026 or into 2027.
