Google Security Disclaimer: Website/Drive/Cloud Data Encryption
Yes, Google encrypts all data AT REST in Drive and Cloud storage servers.
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Does Google encrypt my data at rest within G Suite?
Customer data that is uploaded or created in G Suite services is encrypted at rest, as described in the list below. We have also enabled HTTPS for all of our G Suite services so that your data is encrypted when traveling from your device to Google and also while in transit between Google data centers. The list below details what type of data is encrypted for each G Suite service:
Gmail—Messages and attachments.
Calendar—Events and descriptions of events.
Drive—Files in Drive and all file metadata (e.g. titles and comments.)
Docs—Content authored by the owner or collaborators of the document, except content embedded into the document that is hosted on other Google products not referenced in this list, for example, YouTube.
Sheets (including Forms)—Content authored by the owner or collaborators of the spreadsheets, except content embedded into the spreadsheets that is hosted on other Google products not referenced in this list, for example, YouTube.
Slides—Content authored by the owner or collaborators of the presentation, except content embedded in the presentation that is hosted on other Google products not referenced in this list, for example, YouTube.
Talk—Archived "on the record" conversations.
Hangouts chat—Archived "on the record" conversations. "Off the record" chats are not kept, hence encryption at rest is not applicable.
Sites—Content authored by the owners or collaborators of the site; except (i) content embedded into the site that is hosted on other Google products not referenced in this list, for example, YouTube; (ii) content embedded into the site that remains hosted on other third-party websites, via Sites, Gadgets or image hotlinking.
Contacts—Content of end users’ address books.
Groups—Group message archives.
Vault—Content created by Vault administrators is encrypted; saved queries, audit logs are encrypted. Vault’s exports of Gmail, messages and attachments, Talk conversations, Hangouts chat, and Drive files (except video content) are also encrypted.
Keep—Content authored by the owner or collaborators of the note or list.