Like other big AI spenders, Alphabet turned to debt markets this year, selling $12.5 billion in bonds in May. Alphabet came into the AI race with little debt, so it has a lot more room to borrow, on top of its $98 billion in cash and short-term investments.

"Cloud had another great quarter of accelerating growth with AI revenue as a key driver. The cloud backlog grew 46 percent, quarter-over-quarter, to $155 billion. And we crossed $300 million in paid subscriptions, led by growth in Google One and YouTube Premium," said Pichai.