- Google’s quarterly financial results have been released, showing a massive $74.6 billion in revenue.
- The company has said that its largest single expense has been towards investment in new AI products.
- Alphabet CEO Sundar Pichai says that it will soon bring advertising to its AI-fuelled search engine.
After publishing its latest financial results, Google parent company Alphabet once again showed why its one of the most profitable companies in the world.
Profits for the second quarter of 2023 exceeded expectations set by Wall Street, and Google saw its shares jump after the results, which were more positive than contemporaries like Meta and Microsoft reports Reuters.
Revenues in the last three months stood at $74.6 billion, which by the way is several times more than the total GDP of small countries like Estonia.
One interesting aspect of Alphabet’s results is that Google’s single largest expense in the quarter was related to its efforts in artificial intelligence (AI) innovations. The technology has seemingly been Google’s singular focus heading into 2023 as the tech world sat up and took notice of the enormous popularity of OpenAI’s ChatGPT, and more importantly its massive potential for making profits.
The cost of Google’s AI has even surpassed its cloud investments, which continues to be a profitable arm of its business, raking in $8.1 billion in the quarter.
The majority of Google for developer event, Google IO, this year was on the companies latest AI innovations, and there are many. We wrote that it felt like Google was trying to make up for lost time after it was caught off guard by Microsoft and its own AI efforts.
One important AI product that Google is working on is a revamped Google Search. Already the most popular search engine on Earth, the company believes generative AI could increase its effectiveness, and provide more information to users.
During Tuesday’s investors call, Alphabet CEO Sundar Pichai told the media and analysts that advertising was heading to its revamped search. Advertising is still Google’s main driver of profits, and now Google’s chief business officer Phillipp Schindler says that 80 percent of advertisers use at least one AI-driven search product on the platform. This translates to millions of advertisers.
Google has plans to bring its Bard-fueled generative AI to Gmail, Google Photos, and even Android in the near future. In May it revealed how a generative AI image editor could rework photos faster than what even the most talented Photoshop designers could manage.
The company’s massive investment in the technology is a sign that AI is not only here to stay, but that it won’t be a fad. Or at least the company hopes not. ChatGPT recently saw its first decline in users ever, which could be a sign that AI is beginning to lose some of the craze around it. Or perhaps now there are so many generative AI products in the market that OpenAI’s bot has begun losing some share.
But if AI takes the path of cryptocurrencies, NFTs or even the Metaverse, then this huge investment would be for nought.