SAN FRANCISCO (AP) — Google’s latest quarterly report provides further evidence that its Internet empire is weathering the revolution in artificial intelligence, which is emerging as another potential boon for the company.
The data released on Wednesday marked the third consecutive quarter in which Google’s digital advertising grew by more than 10% year-over-year, while sales at the unit that powers data centers that serve artificial intelligence also increased by more than 30%.
Those gains between October and December pushed Google parent Alphabet Inc.’s earnings well beyond stock market analysts’ expectations.
Alphabet’s fourth-quarter profit rose 30% from the previous year to $34.5 billion, or $2.82 per share, while revenue increased 18% to $113.8 billion.
The collective momentum behind Google’s major businesses in search and advertising and the still-nascent field of artificial intelligence suggests that a company born out of the dot-com boom of the late 1990s has become even more powerful nearly 30 years later in another technological phenomenon.
“Search is being used more than ever and artificial intelligence continues to drive expansion,” said Alphabet CEO Sundar Pichai.
Google’s successful evolution has helped Alphabet’s stock price rise nearly 60% in the past five months, giving it a market value of $4 trillion. Even so, some investors remain skeptical that Google can sustain enough growth to justify the computing power required by Alphabet to spend more than $300 billion from 2024 to the end of this year to expand its artificial intelligence capabilities. Those concerns caused Alphabet’s shares to swing back and forth between modest gains and losses in extended trading following Wednesday’s report.
Apple, which also has a current market capitalization of $4 trillion, thinks so highly of Google’s artificial intelligence that the iPhone maker recently reached a deal to use Google’s Gemini technology to upgrade its virtual assistant Siri, a long-delayed upgrade.
Google is also embedding more of Gemini AI into its long-dominant search engine, Gmail and Chrome browser to avoid complacency and being outdone by emerging companies like OpenAI, Anthropic and Perplexity.
In response to the challenge, Alphabet has been investing heavily to expand its artificial intelligence capabilities. After committing $91 billion in capital spending primarily on artificial intelligence, the Mountain View, California-based company revealed Wednesday that it expects to spend another $175 billion to $185 billion this year. Since OpenAI released the ChatGPT chatbot to widespread acclaim in 2022, its capital expenditure budget has surged from about $30 billion per year, prompting Google to go all out to catch up.
