Google is all-in-the-line AI, and based on the company's latest quarterly revenue, AI is well suited to bottom-line profits. In a press release on Alphabet's second quarter revenue, CEO Sundar Pichai said “AI has a positive impact on every part of the business,” and features such as AI overview and AI modes are “performance.”
According to Pichai, the company also plans to increase its annual planned capital expenditure to up to $85 billion. This is a $10 billion increase, and could be a sign that Alphabet wants to handle large data center build-outs from companies like Openai and Meta. “Our updated outlook reflects the accelerated pace of our data center structure to meet additional investments in servers, timing of server delivery, and primarily cloud customer demand.”
In the quarter, Alphabet reported revenue of $96.4 billion, up 14% year-on-year, with revenues in the Google Search segment reaching $54.1 billion.
Pichai's comments in a press release on AI are consistent with recent findings from Pew. This suggests that AI overviews seem to be successful in getting people's answers, but otherwise at the expense of clicking on the websites that provide them.
AI Mode has over 100 million active users in the US and India, while AI overview has over 2 billion users across “over 200 countries and regions, and 40 languages.” “We also find that AI features allow searches to meet more needs, which will encourage users to search for more users.” Pichai also said the Gemini app currently has 450 million active users per month.
At the same time, Google expects a ruling from the relief phase of the Department of Justice's lawsuit, which was also held in the second quarter. Last August, a judge ruled that Google was “a monopoly” under its antitrust law, and the remedy could include Google being broken. (Many companies have expressed interest in purchasing Chrome.)
Updated July 23rd: Added details from Alphabet's Revenue Webcast.
