Google claims they continue to expand encryption across their services to prevent this, but considering the NSA spends a quarter billion dollars a year to beat encryption this is a fight that can hardly be won.
It's worth checking out the Washington Post story just to see the diagram of the "Google Cloud Exploitation." The image looks like it was scrawled on the back of a Post-it note, and there's a cute little smiley next to the "SSL added and removed here" note pointing to the "Google front end server" linking the search giant's internal cloud to the Internet at large. According to the article, "two engineers with close ties to Google exploded in profanity when they saw the drawing." An official statement from Google legal officer David Drummond is more restrained:Source: The Tech report
We have long been concerned about the possibility of this kind of snooping, which is why we have continued to extend encryption across more and more Google services and links, especially the links in the slide. We do not provide any government, including the U.S. government, with access to our systems. We are outraged at the lengths to which the government seems to have gone to intercept data from our private fiber networks, and it underscores the need for urgent reform.