Google-parent Alphabet Inc on Tuesday reported profit and revenue that beat expectations as its artificial intelligence (AI)-amped cloud and search ads businesses thrived.
The tech giant said its net income for the recently ended quarter was US$23.6 billion on revenue that rose 14 percent to US$84.7 billion when compared with the same period a year earlier.
“Our strong performance this quarter highlights ongoing strength in search and momentum in cloud,” Google chief executive Sundar Pichai said.
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Alphabet reported that its cloud computing unit took in US$10.3 billion in revenue compared with US$8 billion in the same quarter last year, while search ad revenue increased to US$48.5 billion from US$42.6 billion.
The ramped up revenue comes as investors worry that money being poured into AI might not be generating significant returns for tech companies.
“We are innovating at every layer of the AI stack,” Pichai said. “Our long-standing infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”
Only YouTube’s revenue came in slightly below analysts’ forecasts, at US$8.66 billion.
The earnings release came the same day as reports said that Israel-based cloud security start-up Wiz Inc would remain a private company after walking away from a deal to be bought by Google for US$23 billion.
Investors have been keen to learn whether recently added AI-generated query result summaries referred to as “overviews” cause a drop in online ad revenue at Google.
This new feature offers a written text at the top of results in a Google search, ahead of the traditional links to sites.
Many are concerned about the evolution of advertising across the Internet if Google pushes on with the overviews model, which reduces the necessity of clicking into links.
“With AI, we are delivering better responses on more types of search queries and introducing new ways to search,” Pichai said.
Google is seeing increases in search use and satisfaction with AI-powered results, he added.
On the earnings call, chief financial officer Ruth Porat said Alphabet is going to invest another US$5 billion in its Waymo autonomous car unit over the next few years.
A Waymo One robotaxi service last month became available to anyone in San Francisco interested in hailing a driverless cab.
Waymo One is available in San Francisco, Los Angeles and Phoenix, Arizona, with plans to “ramp up” in Austin, Texas, next.
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