Google Cloud's existing customers are spending 50% more than their contracted commitments, CEO Thomas Kurian told CNBC Thursday, helping drive the segment's explosive 82% year-over-year revenue growth.

"Our existing customers have increased their spend when they make a commitment to us," Kurian said. "They're spending roughly 50% more than the commitment."

The surge comes as demand for Google's cloud services outstrips capacity, forcing the company to rent third-party infrastructure from providers like CoreWeave and Nebius for several quarters.

Kurian defended the margin-dilutive move as strategically sound. "It allows us to bring customers in, bridge them over to when we have sufficient capacity available, and then that will compound over time," he said.

AI spending concerns weigh on shares

Alphabet shares dropped 7.1% Thursday despite beating Q2 expectations. Investors balked at the company's raised capital expenditure forecast of $195-205 billion for 2026, up from the previous $180-190 billion range.

The company spent $44.9 billion on capex in Q2 alone, primarily on AI infrastructure. Tech giants are expected to collectively spend roughly $725 billion on AI initiatives this year, with Amazon, Microsoft and Meta reporting next week.

Kurian cited concrete customer returns to justify the spending. Macy's improved shopping basket sizes after deploying Google's AI systems, while Macquarie Bank automated workflows to save processing time.

"We are very disciplined in our capex," Kurian said, emphasizing the "differentiation in our product portfolio" and "strength we have in our go-to-market execution."

Google plans to continue leveraging third-party capacity until its own infrastructure catches up with surging enterprise AI demand.