According to Google, artificial intelligence is currently touching every corner of the business, with the latest revenue revealing how AI has become a company's growth strategy. In the second quarter of 2025, Google's parent company Alphabet reported revenue of $96.4 billion, up 14% year-on-year. Much of that growth is driven by the company's investment in AI across search, the cloud, YouTube and other platforms, according to CEO Sundar Pichai.
“AI has a positive impact on every part of the business,” Pichai said in a press release, adding that features like AI overview and AI modes “work well.” These tools, which provide AI-generated summary and enhanced search capabilities, are already widely used. The AI overview currently has more than 2 billion users in over 200 countries and over 2 billion users in 40 languages, while AI mode has reached over 100 million active users in the US and India.
Google's flagship AI assistant, the Gemini app continues to gain traction with over 450 million active users each month. According to Pichai, daily demands for Gemini increased by more than 50% compared to the previous quarter.
AI has also pushed Google to step up its investment in infrastructure. The company is currently increasing its planned capital expenditure to $85 billion in 2025, an increase of $10 billion. “Our updated Outlook reflects additional investments in servers and an accelerated pace of data center construction,” said Alphabet CFO Anat Ashkenazi. The goal is to support increased cloud demand and maintain Google's global AI infrastructure.
Google highlighted its “full stack” approach to AI, from in-house research and model development to products such as Gemini, Workspace and YouTube. The Gemini 2.5 family of models drive the quarter into several key features, including the popular video generation tool Veo 3, and Flash-Lite, a lighter version of its inference model. Over 70 million videos have been created using VEO 3 since May.
YouTube is also experiencing strong growth, especially in shorts and subscriptions. The company claims YouTube shorts generate more than 200 billion views every day, and some countries claim that revenue per hour is higher than traditional in-stream videos. On the cloud side, Google reported strong demand for AI tools. Over 85,000 companies currently use Gemini on Google Cloud, up 35 times the year-on-year. Clients such as BBVA, Capgemini, and Target have integrated AI agents to increase productivity and automate operations.
In the background, Google continues to navigate regulatory pressures. A ruling is expected soon during the relief phase of the Department of Justice's antitrust case, where the judge previously discovered Google was the monopoly. Despite the challenges, Pichai remains optimistic. “This is a very exciting moment for searching,” he said. We cited AI as a reason for the prominent increase in overall and commercial questions, especially among younger users.
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