Google continues to invest heavily in AI and it is paying off. The cloud business is taking full advantage of the continued demand for AI technology among businesses.
Alphabet, Google’s parent company, last night announced its financial results for the third quarter. The numbers are under the magnifying glass these days. Investors search the tech giants’ quarterly reports for evidence of whether belief in the AI hype is still justified, and the slightest bit of bad news quickly provokes panic reactions.
There is no need for those this quarter, as Google can produce rock-solid numbers. In particular, the Google Cloud branch, the third player in the cloud industry worldwide behind AWS and Microsoft Azure, is fully benefiting from the AI push the company is implementing. The cloud business grew 35 percent to $11.35 billion, exceeding all predictions. Companies are once again flocking to the public cloud to access AI technology.
Expensive gamble
Google Cloud’s fine numbers are a big boost for the entire organization. Generative AI has been a literally expensive gamble for Google. The company must also invest heavily itself in data center capacity to support that demand for AI. Spending by the entire Alphabet group rose to thirteen billion dollars. CEO Sundar Pichai concludes that that spending is paying off.
Google has had a bumpy AI course. The company was caught on speed by OpenAI and Microsoft in 2022 and has long had to be in a chasing position. With Gemini, it is quietly closing the gap. Other goals must give way in return.
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The quarterly figures not only pushed up Google’s share price, but Microsoft and AWS also benefited. Both companies will announce their quarterly results soon. The same trends as Google are expected.
Despite the promising numbers, Google also has hot topics hanging over its head. Google was sued for unlawfully building a monopoly in the search market, which could lead to a breakup of the company.