Alphabet Quadruples Profit to $112 Billion, Fueled by A.I. Investments
Google’s parent company, which has spent heavily on artificial intelligence, also showed growth across its businesses, particularly in cloud computing.
Google’s parent company, which has spent heavily on artificial intelligence, also showed growth across its businesses, particularly in cloud computing.
Alphabet, Google’s parent company, said on Wednesday that its investments in artificial intelligence were paying off and driving growth across its businesses, amid broader questions about whether tech companies’ enormous spending on the powerful technology can be justified.
The Silicon Valley giant, which has shelled out billions to develop cutting-edge A.I. models and to build data centers that provide the computing power for the technology, said revenue for the three months that ended in June totaled $119.8 billion, up 24 percent from a year earlier. In particular, Google’s cloud business, which lets companies rent computing power and A.I. tools, surged 82 percent to $24.8 billion.
Profit rose to $112.1 billion, quadrupling from $28.2 billion a year earlier, boosted by major investments that Google has made in recent years in other A.I.-related companies like SpaceX and Anthropic. Gains tied to those investments were valued at about $99 billion, Google said, and contributed $77 billion to overall profit, especially with SpaceX going public in June.
Google also said it would spend more than it previously predicted to build data centers and other technologies for A.I. development. It estimated that spending would hit $195 billion to $205 billion this year, more than double the $85 billion last year and up from an earlier projection of $190 billion.
“Our A.I. investments are redefining what’s possible across every part of our business,” Sundar Pichai, Alphabet’s chief executive, said in a statement.
The results exceeded Wall Street’s projections of $116.5 billion in revenue and profit of $35 billion.
