Alphabet and Microsoft Report Q4 Profit Boosts from AI and Cloud Computing
Despite Positive Results, Investors Seek More Clarity on AI's Financial Contribution
- Google parent Alphabet and Microsoft have reported significant profit increases for the final quarter of last year, largely attributed to their investments in artificial intelligence (AI) and cloud computing.
- Alphabet reported a profit of $20.7 billion on revenue of $86.3 billion, with strong contributions from YouTube and its cloud computing unit, while Microsoft reported a net income of $21.87 billion for the quarter.
- Alphabet has also revealed it saved $3.0 billion by extending the working life of its hardware, reducing depreciation expenses and increasing net income.
- Despite these positive results, shares of both companies slipped in late trading, with investors seeking more clarity on the potential of AI to contribute to financial performance going forward.
- Alphabet CEO Sundar Pichai teased a future AI subscription service based on the forthcoming Gemini Ultra model, and predicted that investment in capex in 2024 will be notably larger than in 2023.
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