Illustration image showing the Google logo on a screen on April 29, 2018 (AFP / Lionel Bonaventure)
Google resists and even continues to gain ground in artificial intelligence (AI), again exceeding market expectations in the second quarter, despite competition from AI assistants in online research and cloud leaders in remote IT.
Alphabet, the parent giant’s mother house, saw its turnover jump by 14% over a year to more than $ 96 billion, of which it released $ 28.2 billion in net profit in the second quarter, according to its statement of results published on Wednesday.
This growth is notably carried by high demand in AI services, but this technology is expensive.
Sundar Pichai, the boss of the American firm, warned that investments were still increasing, to bring Google’s capital spending to “around $ 85 billion” this year, 10 billion more than expected, to compare with 52.5 milion in 2024.
This information initially lowered the course of action during electronic exchanges after the end of the New York Stock Exchange, but the title took 1.68% after the conference to analysts.
The search engine, which generates most of Google’s recipes thanks to advertising, is particularly monitored while generalist AI assistants such as Chatgpt (OPENAI), or specialized in online research as Perplexity is increasingly competing.
But Google has integrated responses produced by the generative AI in research results, and “so far, the service has managed to avoid a loss of traffic, at least on commercial requests,” said Yory Wurmser, analyst at Emarketer.
He believes that the company also manages to benefit from these responses from these responses, called “Ai Overviews” and “AI mode”. “This is a good omen, since these tools – just like Chatgpt – should start managing purchasing requests in the second half.”
Google and Openai presented their digital shopping assistants in the spring, capable of looking for the best prices, finding the models corresponding to consumer tastes, and even paying purchases if the user has authorized them.
– “All unicorns” –
Google Cloud has once again illustrated with strong growth: its sales jumped 32% to exceed $ 13 billion.
IT number three remotely, behind AWS (Amazon) and Microsoft, has even doubled its operational profit at 2.8 billion.
“Almost all unicorns (start-ups valued at least $ 1 billion, editor’s note) of the generative AI use Google Cloud,” welcomed Sundar Pichai at the conference to analysts on Wednesday.
Even OPENAI, a privileged partner of Microsoft in AI, “chose Google Cloud for its computing power”, underlined Yory Wurmser.
The company has admitted that they do not have the necessary capacities to respond to the huge request for storage on servers, data analysis services thanks to AI and, now, new generative AI tools (creation of Assistants and AI agents in its own, in particular).
The increase in annual spending “reflects additional investments in the servers, the calendar of their delivery, as well as acceleration of the construction rate of data centers, mainly to meet the demand of Clients of the Cloud,” said Anat Ashkenazi, the group’s financial director.
She plans that Google Cloud will generate $ 50 billion in all this year.
– Legal threat –
But in the longer term, the revenues of the American firm are threatened by judicial affairs.
In mid-April, Google was found guilty of having abused its dominant position on the Internet advertising market.
And above all, the company is expecting this summer a decision on its sentence this summer as part of the historic trial it lost in the summer of 2024, when it was found guilty of anti -competitive practices in online research.
The US Ministry of Justice is demanding sentences that could radically change the digital landscape: the sale of the Chrome browser by Google as well as the prohibition to go through exclusivity agreements with smartphones manufacturers to install its default search engine.
He also asks that the technological giant be forced to share the data he uses to produce the search results on his engine.
