Alphabet filing shows $98.5 billion of contingent AI commitments

Bloomberg reported on Thursday, 29 October, that the filing of Alphabet shows more AI risk than its earnings call did. In that earnings call, the company named more than $1 trillion in purchase commitments, future leases and other obligations. The filing adds about $98.5 billion of contingent commitments. Google declined to comment to Bloomberg.

What is in it

Contingent means that Alphabet pays only if set conditions occur. Bloomberg gives these items:

• a guarantee of data center lease payments
• help with power equipment purchases by partners
• a possible duty to buy AI chip systems again from customers

The numbers

The Google Cloud backlog of contracts was $560.8 billion at the end of September. It was $513.9 billion in the quarter before.

Of that, $16.8 billion is linked to a multiyear deal with Crux AI.

Alphabet formed this venture with Blackstone.

What the other side says

An investor, Dan Morgan of Synovus Trust, says that investors did not know the source. The demand came from a firm that the company helped start. The investor says that demand from external customers is a good sign.

Insight: Some AI cloud demand comes from the seller

Gartner says that owners of AI data centers must get $8.5 trillion in revenue through 2030. It forecasts no more than $3.6 trillion. Google seems to hold the risk for partners and to make demand through a venture that is also its customer. Look for the next filing to show how much of the backlog comes from external customers.