Alphabet, the parent company of Google, posted strong results in its Q3 2024 earnings on Tuesday. The company reported revenues of $88.3 billion, a 15% increase year-over-year. Additionally, Google services generated $76.5 billion, up 13% and Google Cloud revenues surged 35% to $11.4 billion.
AI’s contribution to this quarter’s results stood out even as the company focussed on the Gemini application. “Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off and driving success for the company and for our customers,” said Alphabet and Google CEO Sundar Pichai. “We are uniquely positioned to lead in the era of AI because of our differentiated full-stack approach to AI innovation, and we’re now seeing this operate at scale.”
In the past six months, Gemini API calls have increased nearly 14 times. Pichai said that when Snapchat was looking to add more experiences to its ‘My AI’ chatbot, it chose Gemini’s multimodal capabilities. This also resulted in 2.5 times the engagement with the application in the US.
Interestingly, this has also led to lower costs. Pichai said that ever since they started testing AI Overviews, which will now be available in more than 100 countries, thereby reaching 1B+ users, the company has significantly reduced machine costs per query. Over the last 18 months, there has been a cost reduction of over 90% for these queries. At the same time, doubling the size of their custom Gemini model.
Moreover, Pichai even highlighted that employee agents from Gemini for Google Workspace are highly rated, with 75% of daily users noting improved work quality.
AI Everywhere
Not just through Gemini, Pichai said that the company’s expertise and AI portfolio are helping attract new customers and achieve a 30% increase in product adoption among existing clients, including AI infrastructure.
Citing an example of LG AI research that has been using a combination of Google TPUs and GPUs, the team reduced the inference processing time for its multimodal model by over 50% and operating costs by 72%.
Customers utilise the AI platform with BigQuery to analyse multi-modal data from any storage location, achieving ultra-low latency access to Gemini.
While AI has been driving growth in all divisions, the company’s traditional search and ads continued to bring great numbers. Search and other revenues increased by 11% to reach $44.03 billion, while YouTube ad sales saw a notable rise of 12.4%, totalling $7.95 billion.
This has fortified Google’s dominance in the search and ad market despite competitors such as OpenAI and Perplexity trying to challenge it. Interestingly, Meta is also reportedly developing its own AI search engine.
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