SAN FRANCISCO (AFP) – Microsoft and Google on Thursday drubbed quarterly earnings expectations as the tech titans continued investing heavily in artificial intelligence (AI) promising to shake up the way people live.
The results were cheered by Wall Street investors who pushed up Alphabet’s share price more than 11 per cent and Microsoft shares up nearly four per cent in after-market trades.
Google parent Alphabet reported profit of USD23.7 billion on revenue of USD80.5 billion, crediting growth in cloud computing, YouTube, and online search advertising.
Artificial intelligence helped drive the Silicon Valley tech giant’s business, according to Alphabet and Google chief Sundar Pichai.
“We are well under way with our Gemini era and there’s great momentum across the company,” Pichai said, referring to the Gemini AI model that powers services across the Google platform.
“Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”
Some USD9.5 billion was brought in by Google’s cloud computing unit, compared with USD7.5 billion in the same quarter a year earlier. Google also reported its first-ever dividend of 20 cents per share.
“Things are looking good for Google,” said Emarketer senior analyst Evelyn Mitchell-Wolf.
However, the future of Google’s core search business is not assured, the analyst cautioned.
Google faces an antitrust case in the United States (US), and the incorporation of AI-generated content into the company’s leading search engine “will arguably be the biggest change to the search advertising market since its inception”, Mitchell-Wolf said.
The earnings come as Google, Microsoft, Amazon and other rivals competing in the hot field of AI face scrutiny from regulators in the US and Europe.
The US Federal Trade Commission early this year launched a study of AI investments and alliances as part of an effort to make sure regulatory oversight can keep up with developments in the sector and stop major players from shutting out competitors in a field promising upheaval in multiple areas of business.
Amazon – through its Amazon Web Services arm – Microsoft and Google are the world’s biggest providers of cloud-based data centers, which store and process data on a vast scale, in addition to being some of the world’s richest companies.
Microsoft CEO Satya Nadella said sales in the January to March period rose by 17 per cent from a year earlier to USD61.9 billion, with net profit up by 20 per cent to USD21.9 billion.
Microsoft has been hugely rewarded by investors since it aggressively pushed into rolling out generative AI, starting with its USD13 billion partnership with OpenAI, the creator of ChatGPT, in 2023.
The embrace of AI has boosted sales of its key cloud services, such as Azure, which have become the core of Microsoft’s business under Nadella’s leadership.
Cloud giants Amazon and Google are also looking to beef up cloud sales by rolling out AI features to clients and prove that the AI revolution is more than just hype.
