After Google’s parent company Alphabet (GOOGL) reported third-quarter profit that beat analysts’ expectations, CEO Sundar Pichai and other executives told investors that the tech giant is focusing on artificial intelligence (AI). He said the company has seen strong growth driven by demand, with the stock price rising more than 5% over the long term. Tuesday trading.
Investments in AI “are delivering results and driving success”
Pichai told investors that Google’s search and cloud divisions are performing well, driven by demand for AI, and that the tech giant’s investments in AI are “paying off and driving success.” he said.
Google Cloud’s third-quarter revenue increased significantly to $11.4 billion, up 35% year-over-year, driven by growth in AI infrastructure and generative AI solutions, as well as other core cloud products.
“All these AI capabilities are just the beginning.”
Pichai added that he believes the company’s focus on emerging technologies puts it in a “unique position to lead in the AI era.” “This is just the beginning for all these AI capabilities. We’re going to see rapid innovation and progress here,” he said.
Pichai noted that Google search usage is increasing among people using the company’s AI overview, and that Google Lens conducts 20 billion visual searches each month.
Chief Business Officer Philipp Schindler said the company’s new AI-powered features “make search even more useful, and we continue to receive great feedback, especially from younger users.”
AI development is expected to “result in profits in a fairly short period of time”
Chief Financial Officer Anat Ashkenazi, who took over the role in July, signaled that the company expects advances in AI could “translate to profitability fairly quickly.”
Alphabet invested $13 billion in capital spending in the quarter, and Ashkenazy said investors could expect similar numbers in the fourth quarter, as the company ramps up spending on AI. He said he expects the number to increase in 2020.
“This is an area where we need investment,” Ashkenazy said, adding that the company’s moves are “based on demand from our customers.”
