Google’s quarterly results paint a picture of the Internet powerhouse going strong in the AI ​​age

SAN FRANCISCO (AP) — Google’s latest quarterly report provided further evidence that its Internet empire is facing an artificial intelligence shakeup that is turning into another potential boon for the company.

The numbers released Wednesday marked Google’s third straight quarter of digital ad growth up more than 10% from last year, while its division, which powers data centers for AI services, also posted more than 30% sales growth.

In the October-December period, those increases led to Google’s corporate parent Alphabet Inc. beat stock market analysts’ earnings forecasts.

Alphabet’s fourth-quarter profit rose 30% from a year earlier to $34.5 billion, or $2.82 a share, while revenue rose 18% to $113.8 billion.

The collective momentum of Google’s core businesses in search and advertising and the still-new AI field suggests the company born in the Internet boom of the late 1990s is going strong nearly 30 years later in another technology phenomenon.

“With search seeing more use than ever before, AI continues to have an expansive momentum,” said Sundar Pichai, CEO of Alphabet.

Google’s successful growth has helped Alphabet’s stock price rise nearly 60% over the past five months, giving it a market value of $4 trillion. Even so, some investors still doubt whether Alphabet will be able to sustain enough growth to justify the more than $300 billion it will spend from 2024 through the end of this year to expand the computing capacity needed for AI features. Those concerns saw Alphabet’s shares between slight gains and declines during extended trading after Wednesday’s report came out.

Apple, also currently worth $4 trillion, thinks so highly of Google’s AI that the iPhone maker recently struck a deal to use Google’s Gemini technology in a long-delayed upgrade to its virtual assistant, Siri.

Google is embedding more of its Gemini AI into its long-influenced search engine, Gmail and Chrome browser as it tries to avoid complacency and edge out up-and-coming companies like OpenAI, Anthropic and Perplexity.

To meet the challenge, Alphabet is gearing up to spend on expanding its AI capabilities. The Mountain View, Calif.-based company disclosed Wednesday that it expects to double spending this year from $175 billion to $185 billion. Its capital expenditure budget has grown from about $30 billion annually since 2022 when OpenAI released its ChatGPT chatbot to much acclaim, prompting Google to pull out all the stops to catch up.