The artificial intelligence (AI) revolution is becoming increasingly competitive as start-ups and tech industry incumbents vie for a place in this emerging industry.
Like it or not, tech giants alphabet (Google 0.92%) (GOOG 0.87%) They have a huge advantage over start-ups because they can leverage their vast resources to stay ahead of their competitors. This article will focus on his one key resource that Alphabet can use to his advantage.
No, we’re not talking about that huge pile of data (which we’ll cover in a future article). Instead, it will focus on $115 billion of cash, cash equivalents and marketable securities.

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High cost of using AI
Many people tout the importance of AI and the vast opportunities it can bring to enterprises. Yet what is not clear to many of us is the prohibitive cost of developing and running AI models.
Using AI at scale comes at a high cost. Companies like Alphabet have invested in top talent, research and development, computing infrastructure, operating costs, and more to stay competitive. As an example, consider one of his most popular AI services, ChatGPT.
Fully training a large-scale model like ChatGPT would cost millions, if not tens of millions of dollars. And that’s just the beginning. As the user continues to send more and more prompts to her ChatGPT chatbot, it is estimated that running the model costs him $100,000 per day. Training and running these models requires enormous computing power, storage, power, and other cloud infrastructure resources, making them very expensive.
As such, Alphabet’s vast (and growing) cash position puts it in a privileged position to invest in this expensive technology.
Acquisitions and partnerships
when microsoft By announcing that it would deepen its partnership with OpenAI by investing $10 billion and embedding ChatGPT into Bing, it shocked the digital advertising world, especially Google, and emphasized the importance of such a strategic deal.
Strategic partnerships and acquisitions provide access to critical talent and technology. By partnering with or acquiring AI companies, Alphabet may be able to provide access to talent and expertise in various AI areas, particularly in areas where Alphabet may not be on the cutting edge. be. Moreover, it reduces the time it takes to develop and deploy cutting-edge AI technologies and solutions, potentially allowing tech giants to stay ahead of their competitors.
These strategic alliances may also open opportunities for Alphabet to enter new markets or expand its presence in existing markets. Leveraging the acquired company’s expertise and customer base will allow Alphabet to deliver AI-driven solutions to new industries, diversify revenues and capture greater market share.
But again, it takes a lot of money to get the best partners. Fortunately, a cash reserve of over $100 billion will be a key weapon for Alphabet to get there.
The future of AI
The future of AI holds immense potential, and ChatGPT is noteworthy, but perhaps only scratches the surface of AI’s possibilities.
AI will likely permeate and revolutionize both our personal and business spheres. Automation, personalized experiences, autonomous systems like drones and self-driving cars, and the healthcare revolution are just the beginning. In the future, previously unimaginable applications of AI may be realized in various industries.
But reaching such a future requires significant investment and perseverance. This is because many of these ventures are expensive and may not pay off for years. Nonetheless, companies like Alphabet, with their moonshot betting capabilities thanks to deep funding, are well-positioned to withstand these challenges and advance the transformative potential of AI.
Already, similar efforts are underway with venture companies such as self-driving technology Waymo, life science Verily, and Internet balloon-powered Loon. Alphabet has also obtained external funding through venture capital to invest in these projects, further enhancing their chances of survival and growth.
The Alphabet’s Not So Secret Weapon
Alphabet’s formidable $115 billion cash reserves give it a sizable edge in the AI race.
AI models are expensive to develop and operate, but Alphabet’s financial strength is well-positioned to tackle these challenges. And with deep pockets, Alphabet has the means to form strategic partnerships, make major acquisitions, and invest in lunar forecasts to maintain its leading position in the AI race.
AI is the transformative force of our generation, and Alphabet is poised to play a central role.