During the earnings call for the third quarter of 2024, Alphabet CEO Sundar Pichai announced that developers will soon have access to the company’s Gemini AI model.
Alphabet reported a revenue jump of 15%, hitting $88.3 billion. Google Cloud saw an impressive 35% increase, totaling $11.4 billion, thanks to accelerated growth in the Google Cloud Platform, especially in AI infrastructure and generative AI. Pichai emphasized the significant momentum the company is experiencing, highlighting that their ongoing commitment to innovation and investments in AI are benefiting both consumers and partners.
Pichai also shared how AI is transforming Alphabet’s software development. The company is restructuring to enhance speed and agility, while also leveraging AI to improve coding processes. He noted that over 25% of new code at Google is now generated by AI before engineers review and finalize it, ultimately boosting productivity.
He further explained that the Gemini team is now part of Google DeepMind to expedite model deployment and streamline post-training efforts. This structural shift unifies teams across research, machine learning infrastructure, and development.
Incoming CFO Anat Ashkenazi highlighted opportunities for growth driven by AI and expressed confidence in Alphabet’s capability to deliver impactful innovations that will positively affect revenue.
When asked about AI infrastructure investments, Pichai responded that Alphabet has secured top-tier AI accelerators, including GPUs, TPUs, and CPUs, and is also acquiring Nvidia’s latest hardware. Ashkenazi pointed out that 60% of technical infrastructure spending is on servers, with 40% going toward data centers and networking.
Ashkenazi intends to improve margins in the Google Cloud Platform public cloud business. She explained that scaling the business will create more opportunities for margin expansion, highlighting the team’s achievements in driving efficiencies, including careful management of headcount and facilities. She also admitted that every organization has room for improvement, indicating her focus on using AI to enhance Alphabet’s internal processes.
Forrester principal analyst Tracy Woo remarked on Alphabet’s growth, particularly in the cloud and AI sectors. With year-over-year targets being exceeded, she expects the company’s cloud offerings to gain more traction as it continues to invest heavily in cloud AI and enhance its search capabilities.