Google Cloud lost £4.1 billion in 2020

The losses have been attributed to investment in new data centres as Google Cloud expands its operations. 

Google Cloud has reported a loss of $5.61 billion (£4.1bn) for the fiscal year 2020, which ended on 31 December.

The cloud business brought in revenue of $3.83 billion (£2.8 billion) and recorded a loss $1.24 billion (£900 million) for Q4 2020, Google revealed on Tuesday. This marks the first time the company has announced the operating income metric for Google Cloud.

With 2020 dubbed as the year of the cloud due to the fact it's helped keep people connected during the pandemic, an operating loss of $5.61 billion may seem like a grim result for Google. 

However, the company also managed to deliver $13 billion (£9.53 billion) of revenue during 2020, a steady increase from $5.8 billion (£4.25 billion) in 2018 and $8.9 billion (£6.53 billion) in 2019. Despite mounting losses over the year - $4.3 billion in 2018 and $4.6 billion in 2019 - this has been attributed to investment in new data centres as Google Cloud expands its operations. 

In 2020, the cloud giant launched four new cloud regions in Indonesia, South Korea, and the US, and announced another four to come in Qatar, Spain, Italy, and France.

On an earnings call with investors, CEO Sundar Pichai said that Google Cloud will continue to invest going forward.

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“The market dynamics and our momentum in the context of the market is the framework in which we are thinking about the scale of investments - and the pace of investments,” he said, adding that the cloud giant is “definitely investing ahead” in order to ensure that the company is “able to serve the customers globally across all the offerings they are interested in”.

When it comes to Google as a whole, the tech giant reported Q4 revenues of $56.9 billion (£41.73 billion) which, according to CFO Ruth Porat, “was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year”.

Porat also touched on Google Cloud’s results, adding that Workspace is experiencing strong growth among larger businesses, “which are signing meaningful, long-term commitment agreements”.

Google Cloud competitor AWS reported revenues of $12.74 billion (£9.34 billion) and an operating income of $3.56 billion (£2.6 billion) for Q4 alone. For 2020, AWS’s operating income was $13.5 billion (£9.89 billion).

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