MUMBAI: Alphabet & Google CEO Sundar Pichai addressed investors and analysts, highlighting a strong performance in Q4, largely attributed to the company's advancements in artificial intelligence (AI) and a unique full-stack approach.
“Q4 showcased our rapid progress in computing capabilities and efficiencies,” Pichai said. He noted significant improvements in product utilisation, consumer engagement, and revenue growth as a result of innovations in AI, including the launch of AI Overviews in over 100 countries and Circle to Search on more than 200 million android devices.
Notably, Pichai announced that Google cloud and YouTube reached a combined annual revenue run rate of $110 billion at the close of 2024, exceeding their target of $100 billion.
Focusing on AI, Pichai outlined three key areas of innovation: leading AI infrastructure, world-class research, and product integration. The company has invested in eleven new cloud regions and seven subsea cable projects aimed at enhancing global connectivity. Pichai revealed the launch of the Gemini 2.0 AI model, designed to improve user interactions and drive a more multifaceted search experience.
In addition, YouTube continues to thrive, maintaining its position as the leading platform for streaming watchtime in the US with over 45 million viewers engaging with election-related content on a single day. The recent integration of podcasts has proved successful, further solidifying its dominant market position.
Moving to financials, Alphabet's revenue surged to $350 billion in 2024, a 14 per cent increase year-on-year. Expenditures increased, primarily due to content acquisition costs associated with YouTube and depreciation related to technical investments. Despite rising costs, operating income rose 31 per cent to $31 billion.
With an optimistic outlook, Pichai stated, “We are well-positioned for continued growth in 2025,” as plans to enhance AI capabilities and expand cloud services take shape.
Following Pichai, Philipp Schindler, SVP and CBO, highlighted the strong performance across Google services, with revenues reaching $84 billion, driven by a significant increase in advertising revenue.
Anat Ashkenazi, SVP and CFO, reaffirmed the positive momentum, indicating that the company is prepared for ongoing growth amid anticipated challenges.
The market did not believe their posturing totally as Alphabet shares crashed by seven per cent on Wednesday. Investors reacted badly to Pichai's plans to spend $75 billion on capital expenditures over 2025 and $16-18 billion in the first quarter as it builds out its AI offerings and races against megacap rivals to build out data centers and new infrastructure.
