Google’s Android Concession Looms as Cloud Next ’26 Delivers a Flood of AI Deals

Alphabet finds itself navigating a delicate balancing act this spring. The company has just wrapped up its Cloud Next ’26 conference with a barrage of product launches, chip upgrades, and multi-billion-dollar customer wins — yet the mood is tempered by an impending regulatory storm in Brussels that threatens to pry open the very Android ecosystem Google has spent years fortifying.

The EU’s Digital Markets Act Targets Gemini’s Home Turf

European regulators are preparing to enforce the Digital Markets Act in a way that could fundamentally reshape how AI assistants operate on Android. The core demand is straightforward: third-party AI assistants such as ChatGPT and Anthropic’s Claude must receive the same access to Android’s core functions as Google’s own Gemini. For Alphabet, this is no small concession. The company’s entire strategy hinges on embedding Gemini deeply across its product suite — from search to cloud to mobile — and forced interoperability could blunt that competitive edge. The precise scope of the EU’s demands remains unclear, but the direction of travel is unmistakable.

A Fresh Generation of Silicon and a New Enterprise Play

Amid the regulatory noise, Alphabet used Cloud Next to flex its hardware muscle. The company unveiled its eighth-generation Tensor Processing Units in two distinct flavors. The TPU 8t, designed for training large-scale AI models, promises nearly triple the computational power of its predecessor. The TPU 8i, optimized for inference workloads, delivers an 80 percent improvement in performance per dollar spent.

On the software side, Google launched the Gemini Enterprise Agent Platform, built atop its Vertex AI infrastructure. The numbers are striking: roughly 75 percent of Google Cloud customers already use AI products, and the company’s models now process 16 billion tokens per minute through its API. To fuel further ecosystem growth, Alphabet established a $750 million fund aimed at expanding its partner network.

The Startup Catch: Mira Murati’s Thinking Machines Lab Signs On

Perhaps the most eye-catching deal to emerge from the conference involves a familiar name in AI circles. Thinking Machines Lab, the startup founded by former OpenAI executive Mira Murati, has signed one of the largest infrastructure contracts in Google Cloud’s history. Industry insiders peg the value in the single-digit billions. The startup will tap into Google’s infrastructure powered by Nvidia’s latest Blackwell architecture, becoming an early adopter of the GB300 server systems. Early benchmarks show training speeds have already doubled compared to the previous chip generation.

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

This deal is part of a broader pattern. Alphabet has been aggressively locking in top-tier AI developers. Earlier this month, Anthropic secured substantial capacity on Google’s infrastructure. Meta, too, maintains a multi-billion-dollar agreement for Google’s proprietary TPU chips. The message is clear: Alphabet is willing to spend heavily to keep the most promising AI builders inside its tent.

Enterprise Partners and Industry Verticals

The partnership roster extends well beyond AI startups. Samsung SDS is integrating Gemini Enterprise into its cloud platform, with an initial focus on financial services and the public sector. PwC is establishing a dedicated Gemini Enterprise Center of Excellence. Valeo, the automotive supplier, is rolling out Gemini to all 100,000 employees — and already, more than 35 percent of its internal code is generated with AI assistance. SAP and Alteryx are also deepening their Google Cloud integrations.

The $185 Billion Question

All this activity comes at a staggering cost. Alphabet has earmarked up to $185 billion in capital expenditures for the current fiscal year — nearly double the prior year’s spending. The market is no longer debating whether AI growth is real; the question is whether it is fast enough to justify this level of investment. The company must demonstrate that its massive infrastructure outlays are translating into revenue at an accelerating pace.

Earnings on the Horizon

The stock currently trades at around €288.30, just shy of its 52-week high of €291.60 and up roughly 7 percent year-to-date. Over the past twelve months, shares have surged nearly 108 percent. Analysts remain broadly bullish. BMO Capital raised its price target to $410 with an “Outperform” rating. Needham and Jefferies each maintain $400 targets with “Buy” ratings. TD Cowen sees $375, citing strong momentum in agentic workflows.

The real test arrives on April 29, when Alphabet reports first-quarter 2026 earnings. Wall Street expects Google Cloud revenue to grow more than 50 percent year-over-year. Analysts are forecasting earnings per share of $2.68 on total revenue of roughly $107 billion. The new cloud contracts should provide a visible tailwind, but the earnings call will also force management to address the elephant in the room: whether European regulators will cast a shadow over the company’s most ambitious AI integration strategy yet.