Google Q2 Cloud Revenue Up 82%, Capital Spending Raised Further
On July 24, 2025, Google reported Q2 results with cloud revenue up 82% year-on-year and further raised capital spending. Its shares fell the next day. Enterprises are scrutinizing AI spending returns; one platform spent $1,200 in a two-hour demo and 70% of code came from AI tools. Frontier model prices vary up to 100x. Chinese models GLM-5.2 and Kimi K3 launched with scores close to overseas models. US debate on restricting Chinese open-source models continues. North American top five cloud providers' 2025 capital spending reached $411.5 billion, projected to hit $1.02 trillion by 2027, up 32%. Google's Q2 capital spending was 115% of operating cash flow, free cash flow turned negative. Chip companies finance AI labs for chip orders; Nvidia's investment could reach $100 billion. TSMC has no such plans. Global semiconductor capital spending to double to $341.7 billion by 2028. Chinese models account for over 30% of US enterprise calls on open platforms.
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