Alphabet, Google’s parent company, recently reported revenue of $95.5 billion in its most recent quarter, falling slightly short of Wall Street expectations. The disappointing growth in its cloud-computing division, which sells artificial intelligence tools to businesses, contributed to this. The company’s profit was $26.5 billion, surpassing analysts’ estimates. Google Cloud’s sales were $11.95 billion, a 30 percent increase from the previous year, but below expectations.
Questions have arisen about whether Google Cloud will be able to leverage A.I. to compete with Amazon and Microsoft in the cloud services market. Alphabet has invested heavily in strengthening its A.I. offerings, announcing a $75 billion expenditure plan for 2025. The company’s stock dropped 6 percent in aftermarket trading.
Alphabet’s need to excel in A.I. was further emphasized by the success of Chinese A.I. start-up DeepSeek’s chatbot app, which raised concerns about American companies’ spending on A.I. Alphabet’s search engine generated $54 billion in revenue in the fourth quarter, exceeding analysts’ expectations. The company has also been reducing costs through workforce reductions in various departments.
The company faced challenges in maintaining its relevance in the digital services market, given the increasing competition. However, Google’s search engine remains popular and profitable. Despite setbacks, Alphabet’s focus on A.I. and cost-cutting measures reflects its commitment to innovation and efficiency in a competitive tech landscape.
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