Alphabet’s Growth Leans on Generative AI and Cloud Revenue

Alphabet, the parent company of Google, has reported a significant increase in operating profit for the second quarter. This growth can be attributed to the progress made in data center machine efficiency, according to CEO Sundar Pichai.

The introduction of new AI-based services and offerings has played a crucial role in driving Google Cloud’s growth momentum. Pichai and other top executives at Alphabet have recognized these new generative AI offerings as the primary contributors to the company’s success.

The demand for more than 80 foundational models, including third-party and popular open source options, has been strong across the Vertex, search, and conversational AI platforms. The number of customers has grown by more than 15 times from April to June, highlighting the success of these generative AI offerings.

It is worth noting that over 70% of generative AI unicorns, such as Cohere, Jasper, and Typeface, are also Google Cloud customers. This further demonstrates the positive impact of incorporating generative AI capabilities into the company’s services.

Furthermore, these generative AI capabilities have played a role in attracting new customers to Google Workspace, resulting in increases in both seats and average revenue per seat during the quarter. In light of this success, Alphabet plans to expand the application of generative AI capabilities to its Search and Google Ads offerings.

Alphabet’s focus on generative AI and the growth of its cloud revenue signals a strategic move towards leveraging advanced technologies to drive further expansion and success in the market.