There’s a few reasons

1. They gather data about you and use it with their other products to target more ads.
2. They have paid versions of these services (for institutions and individuals) as well, which means they already have to build and maintain them. Adding a more basic, free tier likely costs than a fraction of what they make from paid users.
3. They hope it will entice you to upgrade to the paid versions.
4. They hope to take market share and users away from their competition and even if it costs them money they make it up elsewhere.
5. They want you to use more of their services both because of the reason I mentioned in item 1, but also because it makes it more likely you’ll buy their products like Google Home, Android phones, Chromebooks, etc. because they can more tightly integrate those services in with their devices and offer better experiences.