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First Post
12 hours ago
- First Post
Alphabet sees increase in net profit, says recently launched AI Mode on Google 'going well' in India
The company's revenue grew 14 per cent year-over-year to $96.4 billion, largely fueled by strong Google Cloud sales. The cloud division proved to be a major driver of growth, with revenue increasing 32 per cent from the previous year to $13.62 billion read more Google's parent company, Alphabet, recorded a 19 per cent year-on-year growth in its net profit in the April-June quarter, worth $28.2 billion. The increase in the tech giant's profit is attributable to the launch of Alphabet's AI model, which has been 'going well'. Alphabet's performance in the previous quarter was driven by the expansion of its cloud computing division and the positive impact of its AI products. 'We had a standout quarter, with robust growth across the company. We are leading at the frontier of AI and shipping at an incredible pace. AI is positively impacting every part of the business, driving strong momentum,' CEO Sundar Pichai said. STORY CONTINUES BELOW THIS AD The company's revenue grew 14 per cent year-over-year to $96.4 billion, largely fueled by strong Google Cloud sales. The cloud division proved to be a major driver of growth, with revenue increasing 32 per cent from the previous year to $13.62 billion. Cloud platform and AI emerge as stars of the show Alphabet has been witnessing a boom, and the credit goes to the high demand for Google Cloud Platform (GCP) and an expansion of its core products like AI infrastructure and generative AI solutions. To keep up with rising demand for its cloud products and AI-driven services, Alphabet has raised its capital expenditure forecast for 2025. The company now plans to invest around $85 billion this year, up from its earlier estimate of $75 billion. Anat Ashkenazi, chief financial officer (CFO) of Alphabet, said, 'Our updated outlook reflects additional investment in servers, the timing of delivery of servers, and an acceleration in the pace of data centre construction, primarily to meet cloud customer demand.' The company's end-to-end AI search experience on Google, AI Mode, has been launched in the US and India, and 'has received positive feedback'. AI Overview on Google now has over 2 billion monthly users in more than 200 countries. Still, some analysts warned that the higher spending may draw fresh scrutiny from investors, who have largely stayed on the sidelines this year. Alphabet shares are up just 0.5 per cent in 2025, trailing Microsoft's 20 per cent increase and a 22 per cent rise in Meta stock, also held back by regulatory battles that are looking to break its illegal monopoly in the search and ad-tech markets. STORY CONTINUES BELOW THIS AD With inputs from agencies
Time of India
a day ago
- Time of India
CEO Sundar Pichai on Google Cloud's OpenAI partnership: 'With respect to OpenAI, look...'
CEO has said that he is 'excited' about a new partnership that sees the search giant supplying cloud computing resources to Microsoft-backed , one of its competitors in the artificial intelligence (AI) space. Tired of too many ads? go ad free now The comments came during Google's second-quarter earnings call, where Pichai addressed analyst questions about the company's aggressive AI investments after reporting strong results in Alphabet's first quarter 2025. 'With respect to OpenAI, look, we are very excited to be partnering with them on Google Cloud ,' Pichai stated. 'So super excited about our partnership there on the cloud side, and we look forward to investing more in that relationship and growing that,' he added. Pichai emphasised that Google Cloud operates as an 'open platform' with a history of supporting innovative companies, startups, and AI labs. Pichai highlighted Google Cloud's success in securing deals with several prominent AI labs, including Anthropic, Safe Superintelligence – the AI startup by OpenAI co-founder Ilya Sutskever, and Fei-Fei Li's World Labs. He attributed this success to Google's robust supply of both Nvidia GPU chips and its proprietary in-house TPU chips, essential for training and serving large AI models. 'Our strong relationship with NVIDIA continues to be a key advantage for us and our customers. We were the first cloud provider to offer NVIDIA's groundbreaking B200 and GB200 Blackwell GPUs, and will be offering their next-generation Vera Rubin GPUs,' he added. OpenAI's partnership with Google Cloud Earlier this month, OpenAI quietly updated its public list of cloud computing suppliers to include Google Cloud, alongside existing partners Microsoft and Oracle. Tired of too many ads? go ad free now This followed a report by news agency Reuters in June, indicating OpenAI was exploring tapping Google Cloud for additional computational power. The partnership arrives as Google intensifies its focus on developing leading AI models and products. Despite ChatGPT posing a competitive threat to Google's core Search business, the deal brings a new customer for Google Cloud which has seen a strong growth in the recent quarters. The division's revenue soared by 28% to $12.3 billion in the first quarter. Google attributes a substantial portion of this growth to the Google Cloud Platform and other products catering to AI companies.
Time of India
2 days ago
- Time of India
Google parent Alphabet surprises with capital spending boost after earnings beat
Alphabet on Wednesday cited massive demand for its cloud computing services as it hiked its capital spending plans for the year to about $85 billion and predicted a further increase next year. The search giant strongly beat Wall Street estimates for quarterly revenue and profit on the back of new AI features and a steady digital advertising market. Revenue growth was driven by Google Cloud's sales, which surged nearly 32%, well above estimates for a 26.5% increase. "With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures." CEO Sundar Pichai said in an earnings release. Shares of the company, which have risen more than 18% since its previous earnings report in April, dipped initially in extended trading after the report before rallying as executives shared details about strong cloud demand on a call with analysts. But investors were surprised by the planned capital spending increase. "I don't think anyone was expecting a change to that 2025 capex guide," said Dave Wagner, portfolio manager at Aptus Capital Advisors. "Google had an amazing quarter. It was an easy beat, and it was just offset by this $10-billion increase in capex." Capital spending is expected to increase further in 2026 due to demand and growth opportunities, Chief Financial Officer Anat Ashkenazi said on the call. Ashkenazi added that while the pace of server deployment has improved, Alphabet continues to face more customer demand for its cloud services than it can supply. Google had earlier pledged about $75 billion in capital spending this year, part of the more than $320 billion that Big Tech is expected to pour into building AI capabilities. CLOUD GAINS The rise of artificial intelligence technologies has propelled demand for cloud computing services. Google Cloud still trails Amazon's AWS and Microsoft's Azure in total sales, but has tried to gain ground by touting AI offerings, including its in-house TPU chips that rival Nvidia's GPUs. The business segment grew its quarter-over-quarter customer count by 28%, Pichai said on the call. "The comprehensiveness of our AI portfolio, the breadth of our offerings, both providing our models on GPUs and TPUs for our customers, all of that has been really driving demand," he said. In a huge win for Alphabet, ChatGPT maker OpenAI recently added Google Cloud to its list of cloud capacity suppliers, as Reuters exclusively reported in June, in a surprising collaboration between two companies that are competing head-to-head in AI. It also marked OpenAI's latest move to diversify beyond its major backer Microsoft. The capex increase nevertheless raises concerns about Alphabet's pace of monetization and its impact on near-term profitability, senior analyst Jesse Cohen said. Alphabet and its peers have defended their aggressive AI spending amid rising competition from Chinese rivals and investor frustration with slower-than-expected payoffs, saying those massive investments are necessary to fuel growth and improve their products. AI RACE Google Search's artificial intelligence features such as AI Overviews and AI Mode are also helping the company boost engagement and tackle rising competition from chatbots such as ChatGPT that have surged in popularity. AI Mode has grown to 100 million monthly active users just two months after Google announced the start of its large-scale rollout during its annual developer conference. Google's own ChatGPT competitor, called Gemini, has more than 450 million monthly users, Pichai said. Google's advertising revenue, which represents about three-quarters of the tech major's overall sales, rose 10.4% to $71.34 billion in the second quarter, beating expectations for $69.47 billion, according to data from LSEG. "Hopefully, this will damper concerns by the investment community that has been worried that products like OpenAI/ChatGPT could be having an impact on Google's Search query growth," said Dan Morgan, senior portfolio manager at Synovus Trust. Alphabet reported total revenue of $96.43 billion for the second quarter ended June 30, compared with analysts' average estimate of about $94 billion, according to data compiled by LSEG. The company reported profit of $2.31 per share for the period, beating estimates of $2.18 per share, according to LSEG data.
