According to Zuckerberg, “We’re adding another layer of privacy and security to WhatsApp: an end-to-end encryption option for the backups people choose to store in Google Drive or iCloud. WhatsApp is the first global messaging service at this scale to offer end-to-end encrypted messaging and backups, and getting there was a really hard technical challenge that required an entirely new framework for key storage and cloud storage across operating systems.”
For those unfamiliar with what this means, end-to-end encryption means that only the intended devices will be able to decrypt the contents of the chat and backup. This means that even in the event it is intercepted in the middle, the attacker would not be able to decrypt its contents. Prior to this, the lack of end-to-end encryption for its backups could be considered to be one of WhatsApp’s weaknesses.
That being said, recently it was discovered that Facebook employs contractors who have special tools that can apparently break the encryption of chats, so you’ll have to take the company’s latest announcement at face value for now.