TECH giant Alphabet, Google’s parent company, reported robust fourth-quarter results on Tuesday, with revenues jumping 12 per cent to US$96.5 billion, but analysts saw reason for concern in costs associated with artificial intelligence.
The company’s share price sank as much as 7.5 per cent in after-hours trading as investors were disappointed by lower-than-expected revenue growth and the company’s ambitious capital spending forecast for 2025.
Google Cloud, while growing 30 per cent to US$12 billion, fell short of expectations, raising questions about the division’s ability to compete with rivals in the heated cloud computing and AI infrastructure market.
“Q4 was a strong quarter driven by our leadership in AI and momentum across the business,” said Alphabet CEO Sundar Pichai.
“We are building, testing, and launching products and models faster than ever,” he said.
Looking ahead, Alphabet announced plans to invest approximately US$75 billion in capital expenditures in 2025, a figure that surprised analysts and highlighted the mounting costs of AI development.
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Like other tech giants, Alphabet is betting heavily on artificial intelligence across all its products.
In December, the company announced the launch of Gemini 2.0, its most advanced AI model to date.
The company’s core Google Services segment, which includes search and YouTube, posted revenues of US$84.1 billion, up 10 per cent year-over-year.
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Within this segment, YouTube advertising revenue grew to US$10.5 billion, while Google Search revenue reached US$54 billion.
The company’s workforce remained largely stable at 183,323 employees, reflecting ongoing cost control measures.
Hanging over Google in 2025 are two major antitrust cases in the United States concerning the company’s dominant position in search engines and ad technology.
A US judge has already found Google operating an illegal monopoly in search, and the company faces potential forced restructuring, including the possible sale of Chrome, its world-leading web browser.
Meanwhile, Britain’s competition watchdog recently launched its own investigation into Google’s search engine market dominance and its impact on consumers and businesses.
The decision in the US ad tech case is expected in the coming weeks. REUTERS
