Alphabet's first-quarter earnings exceed expectations, driven by AI and cloud growth

Stocks of Alphabet, the parent company of Google, have risen more than 12 percent as a result of the firm's first-quarter sales and earnings exceeding forecasts. Due to major advancements in cloud computing, YouTube, and online search advertising, the internet giant posted a $23.7 billion profit on $80.5 billion in revenue.

Artificial intelligence (AI) has been important in the success of Alphabet, according to the company's CEO, Sundar Pichai. Referring to the AI model that drives services throughout the Google platform, Pichai said, "We are well underway with our Gemini era and there's great momentum across the company."

He added, "Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation."

As the profits were announced, Alphabet shares, which had closed the official trading day marginally down, shot up more than 12 percent to $177 in after-market trading.

A substantial rise from $54.5 billion in the same period last year was evident in the earnings report, which showed that Google advertisements produced a total of $61.7 billion in the quarter.

Up from $6.7 billion in the first quarter of 2023, YouTube's ad revenue reached $8 billion. In addition, the cloud computing division of Google reported $9.5 billion in sales for the quarter, up from $7.5 billion in the last year.

These remarkable results come at a time when industry titans like Microsoft, Amazon, and Google are under increased regulatory scrutiny in the AI space. To make sure that regulations keep up with advancements in artificial intelligence, the US Federal Trade Commission (FTC) has begun researching AI partnerships and investments.

Lina Khan, chairwoman of the Federal Trade Commission, said, "Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition."

One of the main concerns of regulators is the dominance of large tech corporations in supplying the huge computer capacity needed for generative AI, which allows software to produce human-level material quickly.

Being the top three cloud-based data center providers globally, Amazon, Microsoft, and Google are in a unique position to supply the processing power required for advanced artificial intelligence.

Microsoft reportedly invested $13 billion in OpenAI, the company that developed ChatGPT, significantly stepping up its efforts in the generative AI field.

Microsoft recently revealed that it will invest $2.9 billion in Japan over the next two years to improve cyber defenses against threats from China and Russia and to strengthen the nation's artificial intelligence capabilities.

In the meantime, Wall Street saw a drop in the share price of Meta, the parent company of Facebook, despite the firm's stellar quarterly profits and worries about the expenses of artificial intelligence.

Source: AFP