Like its rivals, Alphabet has been spending heavily on AI.
Part of that is boosting its search business to become a more capable competitor to Microsoft-backed OpenAI. It is also investing heavily in its cloud business, announcing plans to spend billions to open data centers worldwide.
Google has also integrated its generative AI chatbot Gemini into its cloud, bringing customers features ranging from AI-driven code generation to data processing, and intelligence on cybersecurity threat risk.
These investments are paying off. Customers have increased their spending on its AI services, including the Vertex AI platform, which allows businesses to use the company’s models and develop their own custom models.
The company’s new finance boss Anat Ashkenazi, who took over from Ruth Porat, said Alphabet’s capital expenditures in 2025 would be higher than this year.
“The Google Cloud business significantly exceeded expectations with meaningful acceleration and margin expansion,” said Gil Luria, head of technology research at D.A. Davidson. “This has been the main area where Google has been able to translate its AI capabilities into revenue growth.”
Reporting by Deborah Sophia in Bengaluru; Additional reporting by Kenrick Cai in San Francisco; Editing by Sayantani Ghosh and Mrigank Dhaniwala
