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Alphabet’s Revenue Increase
Alphabet, the parent company of Google, said on Tuesday that its revenue increased in the most recent quarter, but its stock fell due to worries that it could be overspending on artificial intelligence.
Google and its competitors are investing billions of dollars on data centers and artificial intelligence, but significant returns on investment are still difficult, and the emergence of China’s DeepSeek model, which is less expensive, raises concerns about how much money should be spent.
“We are pushing the next frontiers from AI agents, reasoning, and deep research to state-of-the-art video, quantum computing, and more,” Alphabet CEO Sundar Pichai stated during a call for earnings.
“The company is in a great cadence and cadence, building, testing, and launching things faster than ever before.”
Pichai’s AI Product Growth
According to Pichai, this is resulting in more people using its products, such as the AI search summaries that are currently accessible in over 100 countries.
Although Alphabet reported a 12 percent increase in sales to $96.5 billion during the quarter, investors were dissatisfied with the company’s ambitious capital investment plan for 2025 and the lower-than-expected revenue growth, which caused the share price to plummet more than 7% in after-hours trading.
Despite a 30% increase to $12 billion, Google Cloud’s revenue fell short of projections, casting doubt on the division’s capacity to compete with rivals in the fiercely competitive AI infrastructure market.
Highlights rising AI development costs
“Q4 was a strong period driven by our top executives in AI and momentum throughout the business,” Pichai remarked.
“We’ll continue to invest in our cloud business to make sure we can address the increase in client demand.”
Google is developing “even better thinking models” that it will soon make available to developers, Pichai continued.
Analysts were taken aback by Alphabet’s announcement that it will invest around $75 billion in capital expenditures in 2025, which brought attention to the growing expenses of AI development.
Alphabet is making significant bets on artificial intelligence for all of its products, much like other digital behemoths.
“Part of the explanation we are so excited about the AI potential is we know we can drive amazing use cases because the cost of actually using it is going to keep going down,” Pichai stated.
YouTube’s advertising revenue: $10.5 Billion
“The chance for space is as big as it comes, and that’s why you’re witnessing us meeting that moment.”
The business revealed Gemini 2.0, its most sophisticated AI model to date, in December.
The company’s main Google Services division, which includes YouTube and search, reported $84.1 billion in sales, a 10% increase over the previous year.
Google Search generated $54 billion in income within this area, while YouTube’s advertising revenue increased to $10.5 billion.
Waymo, the autonomous vehicle subsidiary, made “tremendous progress” last year, according to Pichai, who told financial analysts that its robotaxi service is averaging 150,000 rides each week.
Google Antitrust Actions
According to Pichai, Waymo One robotaxi operations will grow to Miami the next year after expanding to Austin and Atlanta this year.
“And in the coming weeks, Waymo One automobiles will arrive in Tokyo for their first global road trip,” Pichai stated.
With 183,323 workers, the company’s employment was relatively constant, indicating continued cost-cutting efforts.
Two significant antitrust actions in the US pertaining to Google’s hegemonic position in search engines and ad technologies loom large over the corporation in 2025.
Google faces probable forced restructuring, including the sale of Chrome, its top online browser, after a US judge deemed the corporation running an unlawful search monopoly.
Google’s Market Dominance Probe and Antitrust Investigation
In the meanwhile, Google’s market dominance and its effects on companies and consumers have been the subject of a recent probe by Britain’s antitrust authority.
In the upcoming weeks, the outcome of the US ad tech lawsuit is anticipated.
“Between defending itself toward antitrust lawsuits from multiple governments, courting US TikTok advertisers to capitalize on a yet-elusive ban, reconfiguring pursuit around generative AI, and convincing the market to make an investment in Gemini, Google is fighting ongoing battles on several fronts,” Evelyn Mitchell-Wolf, a senior analyst at
“Given this chaotic backdrop, Google’s core ads operation has maintained healthy growth.”
