Google to Invest Heavily in AI, boosting Capital Spending to $85 Billion This Year
Alphabet, the parent company of Google, announced plans to significantly increase its investments in artificial intelligence (AI) services, projecting capital spending to reach approximately $85 billion for the current year. CEO sundar Pichai expressed enthusiasm for future opportunities, as stated in a company press release. This proclamation led to a 1.20% dip in Alphabet’s stock during after-hours trading on Wall Street.
The tech giant is a key player in the generative AI sector, offering a range of AI-powered solutions from consumer-facing AI assistants to enterprise tools distributed through its Google Cloud platform.analyst Yory Wurmser of Emarketer noted that Google has successfully maintained its online search revenue despite competition from OpenAI’s AI assistant, ChatGPT.
Beyond AI, Google’s YouTube division demonstrated strong performance, generating $9.8 billion in advertising revenue between April and June, a 13% increase attributed to the introduction of new video advertising formats. Furthermore, Google Cloud, which encompasses data storage and AI-driven data processing services, more than doubled its operational profit year-over-year, reaching $2.8 billion.
