Google turned 25 this year.
The tech giant, now a stem of parent company Alphabet, is hitting the quarter century mark in a new era of innovation demarcated by the generative artificial intelligence (AI) capabilities and foundation models that its own research labs and teams helped spearhead.
On Alphabet third quarter 2023 earnings call Tuesday (Oct. 24), CEO Sundar Pichai told investors that “more than half of all funded generative AI startups are Google Cloud customers.”
He listed a few company names for the audience and added that more than 60% of the world’s 1,000 largest enterprise organizations also use Google Cloud to support their workflows.
Last quarter, Pichai reported that 70% of generative AI unicorns were using Google Cloud. In the time since Q2 and Q3 2023, Pichai said that the number of active generative AI projects being built on Alphabet-owned platforms grew by sevenfold.
Google’s Cloud revenue grew 22% from a year earlier, almost double the rate of growth for the company as a whole.
And while Google’s Cloud business, with about $20 million earnings estimate miss, while paltry compared to the $8.41 billion the division brought in, still sent the company’s stock falling after-hours and got the attention of traders; it was generative AI that was the central story of the 25-year-old tech giant’s latest earnings.
“With AI-driven innovations across Search, YouTube, Cloud, our Pixel devices and more, we’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come,” Pichai said.
Read also: Google and Microsoft Spar Over Training Rights to AI Data
“With generative AI applied to search we can answer new types of questions and link to a wider range of sources, creating new content discovery opportunities,” Pichai said, adding that “people are finding ads more helpful” in the new generative AI search experience.
The integration of AI capabilities into search via Google’s Bard product is providing both users and advertisers a better search experience.
Recent dramatic advances are “proving our ability to deliver better profitability for advertisers and more delightful experiences for users,” said Philipp Schindler, CBO at Google, to investors on the call.
Schindler also shared that Google was expanding generative AI search capabilities to Indian and Japanese markets in their native languages, with more countries in the pipeline.
“People have always looked for information in a variety of different ways,” Pichai said to investors, adding that a “part of the work we do with AI in search is to support that.”
The CEO also said “there will be many ways” for Google users to take advantage of and engage with AI more broadly as well.
As reported earlier this month by PYMNTS, Google on Oct. 4 unveiled a digital assistant powered by generative AI that can interact with users through various mediums such as text, voice and images.
Read also: Google Wants to Turn Its Devices Into App-Killers With AI
Google’s emphasis on AI integration aims to provide a more intuitive and intelligent experience to users that adapt to their needs and handle personal tasks in innovative ways across various mediums.
“Omnichannel is the way to succeed,” Schindler said.
Pichai, for his part, said to investors on the call that the company’s next generation AI foundation model, Gemini, won’t just be omnichannel — it will be multimodal.
“We are really laying the foundation of the next generation series of models that we’ll be launching through 2024,” the CEO said. “The pace of innovation is impressive to see.”
Calling Gemini a multimodal foundation model, Pichai said it will “enable future innovations” and that Alphabet will be “using it immediately across products internally.”
Once released, Gemini will also be available in “different sizes and capabilities” for other companies to take advantage of.
“Early results are very promising,” Pichai said.
He explained elsewhere during the call that Alphabet was committed to “building and deploying AI responsibly” by helping people identify when they are encountering AI generated content online.
And while Google has been expanding its digital wallet initiative, the product did not get much airtime on the earnings call.
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