Google develops a number of AI products and also frequently uses AI in the development of these products. “More than a quarter of all new code at Google is generated by AI, then reviewed and accepted by engineers,” CEO Sundar Pichai said on the company’s third-quarter 2024 earnings call. It's a big milestone that shows how important AI is to the company.
AI also helps Google make money. Alphabet reported revenue of $88.3 billion for the quarter, with Google Services revenue (including search) coming in at $76.5 billion, up 13 percent year-over-year, and revenue with Google Cloud (including AI infrastructure products for other companies) $11.4 billion, up 35 percent year-on-year.
Operating income was also strong. Google Services had revenue of $30.9 billion, up from $23.9 billion last year, and Google Cloud had revenue of $1.95 billion, a significant increase from $270 million US dollars last year.
“In search, our new AI capabilities expand what people can search for and how they search for it,” CEO Sundar Pichai said in a statement. “In the cloud, our AI solutions help increase product adoption among existing customers, attract new customers and close larger deals. And YouTube’s total advertising and subscription revenue exceeded $50 billion for the first time in the last four quarters.”
But Google faces a potentially difficult road after ruling in August that the company is a monopolist in the search and advertising markets. This case filed by the US Department of Justice is currently in the remedial stage, and while there is still some work to be done before the dust settles, a separation from Google is on the table.