Google says over half of generative AI startups use its cloud

When staff depart Google to hitch the substitute intelligence startup race, the search big nonetheless has a method to profit — by retaining these former employees as cloud prospects.

More than half of venture-backed generative AI startups pay for Google’s cloud computing platform, Alphabet Inc., Google’s dad or mum firm, stated Tuesday. Of the startups valued at over $1 billion, 70% are Google Cloud prospects, and a few third of these are helmed by former staff, together with Anthropic, Character.ai and Cohere, the corporate stated. That provides Google a method to lengthen its affect within the discipline even when it sheds expertise.

Google’s cloud unit, which reported a revenue for the primary time this yr, has emerged as one of many firm’s greatest bets for progress as its core search enterprise matures. Google nonetheless trails Amazon.com Inc.’s AWS and Microsoft Corp.’s Azure available in the market. But startups within the discipline of generative AI — applications that may spin up photographs, textual content and video from easy prompts — are more and more turning to the corporate, stated James Lee, Google Cloud’s basic supervisor for startups and AI.

“We’re seeing strong momentum in our business, and we see Google Cloud as the preferred choice for startups building generative AI,” Lee stated in an interview.

Google Cloud prospects have the choice to make use of AI fashions from Google itself in addition to different firms, a level of flexibility that appeals to startups, Lee stated.

Alphabet Chief Executive Officer Sundar Pichai stated earlier this yr that by his depend, greater than 2,000 startups have been created by former staff, a few of which change into prospects or ultimately boomerang again to Google. “I think it’s a healthy part of how the ecosystem works,” he stated.

Elemental Cognition CEO David Ferrucci says Google has additionally been within the AI house for thus lengthy, he trusts that the group will “talk a common language” when discussing his firm’s wants, he stated. Elemental makes use of Google Cloud completely.

Google decided the proportion of startups utilizing its platform by cross-referencing its record of cloud computing purchasers with analysis agency PitchBook’s record of generative AI startups which have raised cash from enterprise capital corporations, accelerators, particular person traders and different sources, an organization spokesperson stated. Google excluded prospects that didn’t meet a minimal degree of spending, although cloud computing credit that the corporate doles out to startups counted towards that threshold, the spokesperson stated. Some of the startups use different cloud suppliers as effectively, Lee stated.