Google forecasts $ 75B on expenses like AI Investments Balloon

The numbers

$ 350 billion – Alphabet’s revenue in 2024 throughout the year, an increase of 14% from $ 307 billion in 2023.

$ 96.47 billion -Q4 revenue, up 12% year-over-years, but under the projections of analysts. As a result, Alphabet shares fell up to 8% in trading after hours Tuesday. The company’s search and sky companies represented the largest contributors for revenue, respectively.

$ 84.1 billion -Google Services -Quarter revenue, a 10% increase from the previous year, thanks to a large part of a strong growth in Google search, YouTube ads and other sources of ad revenue.

11.96 billion dollars -Google Cloud revenue for the 4th quarter, an increase of 30.1% from the same period last year, partly due to progress in AI infrastructure. Google secured a new cloud business from major players, including Mercedes Benz and Mercado Libre in 2024. The figure was still coming under the $ 12.19 billion expected of Wall Street.

$ 75 billion – Alphabet’s planned capital costs in 2025, as the company invests more in AI.

The water cooler

AI was surprisingly a core focus for Google in 4th quarter programs and the development of advanced products and platforms.

Recent AI -Benchmarks for Tech giant includes the debut of Google Agentspace, a platform for custom AI agents for businesses, and the December message on Willow, Google’s Quantum Computing Chip, designed to mitigate errors when scaling. In Generative AI, Google Gemini revealed 2.0 flash, a high-speed model with low latency and VO2 and image 3, its latest video and photo generation models. In its search business, Google has launched AI listings in more than 100 countries.

As AI expenses increase, the alphabet tightens expenses elsewhere. CFO Anat Ashkenazi, who took up the last July from Eli Lilly, has emphasized cost savings when the company increases investments in AI. Stiffening for potential redundancies this month, employees have allegedly produced an internal petition for job security. Google has offered volunteer buyouts to employees in its platforms and devices spanning Android, Pixel, Fitbit and other products.

Google’s latest revenue report comes in the midst of rising legal challenges. The US Department of Justice is based on a August decision that Google has a monopoly in search, in November, proposed a forced divestment of its Chrome browser. If pursued, the move would mark one of the most significant antitrust acts in technical history.

Meanwhile, the company is also the goal of an antitrust case regarding its advertising technology business. Closing arguments wrapped in November, and Leonie Brinkema, judge at the district court of the eastern district of Virginia, is expected to make a decision soon.

Leaders did not comment on any of the cases during Tuesday’s earnings call.

The central quote

On a call with investors, CEO Sundar Pichai said: “We are making dramatic progress across calculations, model functions and by driving efficiency. We quickly deliver product improvements and see a great momentum with consumer and developer use. And we push the next boundaries from AI agents, reasoning and deep research, to advanced video, quantum calculation and more. The company is in a large rhythm and cadence that builds tests and launches products faster than ever before. This translates into product consumption, revenue growth and results. “