Google is going to make more profits from AI
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Google parent Alphabet reported its third quarter earnings Tuesday, which showed more spending on AI infrastructure and muted cloud growth, leaving executives with many questions about how all the efforts around artificial intelligence will actually yield results.

In its third quarter, Alphabet reported revenue growth of 11%, returning to double digits for the first time since 2013. Cloud revenue disappointed investors, however, causing the stock to drop in extended trading.

The company’s capital expenditures in Q3 grew to $8 billion, driven primarily by AI compute and related technical infrastructure. Even though executives continually say that advanced artificial intelligence is still in its infancy, many are wondering what the return will be as costs rise.

Several times during Tuesday’s question-and-answer session with investors and analysts, the company mentioned how AI will be monetized.

Last November, ChatGPT was launched to the public, setting off a wave of artificial intelligence hype. In response, Google has created its own chatbot, Bard, and undertaken various AI experiments across the company. Especially with large data sets, analysts and technologists estimate the training process for large language models can be extremely costly.

SG is still in its infancy in terms of how much we have rolled out, Pichai said. But we have definitely reached enough people geographically across user segments and enough to know that the product is working.”

The “true north” is getting the right user experience, he said.

Google launched an “early experiment” called Search Generative Experience in August, which lets users experience what a generative AI experience would look like. Due to the age of chatbots, the result is more conversational.