Alphabet Enlists IBM’s Thousands of Consultants as Cloud Revenue Surges 63%

Alphabet is deploying a two-front strategy to dominate enterprise artificial intelligence: building its own data centers at a historic pace while forging a partnership that puts thousands of outside consultants on its cloud platform. The approach — and the $84.75 billion equity raise funding it — has left investors weighing near-term dilution against a long-term opportunity the companies themselves describe as a “multi-billion-dollar chance.”

The alliance centers on a new “Google Cloud Practice” within IBM Consulting. Thousands of consultants will design and roll out industry-specific AI solutions for banks, retailers, telecom operators and hospitals. Technically, the deal marries Google’s Gemini Enterprise Agent Platform with IBM’s Consulting Advantage framework, and Gemini will also be integrated into IBM’s watsonx platform. As a proof of concept, the pair point to an Airbus project where over 100 critical systems were modernized in less than 18 months.

The timing of the announcement caught the market off guard. Alphabet revealed the tie-up just as it was absorbing the blow from its record equity offering: up to $85 billion in new shares, with Berkshire Hathaway locking in a $10 billion private placement and an at-the-market program set to begin in the third quarter of 2026. The dilution knocked the stock roughly 7% over seven days. But ARK Invest saw an entry point, snapping up nearly $96 million worth of Alphabet shares on Wednesday as the price retreated.

Meanwhile, the physical infrastructure buildout is accelerating. On June 2, Alphabet broke ground in Horndal, Sweden, on a data center designed to feed excess heat into the local grid. A €5 million fund will back education and sustainability initiatives in the region. Nearly 60 Swedish suppliers are involved during construction, and once operational the facility will create 100 full-time jobs. The Horndal project is a symbol of a much bigger push: capital expenditure for 2026 is pegged at between $180 billion and $190 billion, a historic level, with management already signaling an even larger sum for 2027.

Should investors sell immediately? Or is it worth buying Alphabet?

The spending spree is underpinned by breakneck cloud growth. Google Cloud generated $20 billion in revenue in the first quarter of 2026, up 63% year on year, while its backlog surpassed $460 billion. CEO Sundar Pichai has repeatedly said demand for AI services outstrips supply. On the consumer side, the Gemini app now attracts roughly 900 million monthly users, and the company’s AI consumer business recorded its strongest quarter ever at the start of the year.

At the exchange, the mood is more cautious. Alphabet shares closed Wednesday at €309.80 on the Xetra platform, about 12% below the 52-week high of €350.75 hit in May. The relative strength index of nearly 40 points to oversold territory, though the stock has more than doubled over the past twelve months and is still up 16% year to date. The equity offering’s final settlement for Class A and Class C shares took place on June 4, and the ex-dividend date arrives on June 8 — Alphabet is maintaining regular payouts despite the massive capital demands.

Whether the dilution is a fair price for the infrastructure push will become clearer over the next few months. Alphabet is expected to report second-quarter results in late July, and the first close-up on the capital raise’s impact should emerge before then. For now, the company is presenting a unified narrative: sell not just cloud capacity, but a full transformation platform — backed by a Swedish data center that warms a local town and an IBM army that sells to entire industries.