Alphabet CEO: AI, GenAI, Cloud Gave Google Edge In 2023

‘With ISVs, we have nearly tripled the number of co-sell deals from 2022 to 2023. In our ecosystem, there are nearly 90,000 Google Cloud GenAI-enabled consultants, and Accenture has teamed up with Google Cloud to create a joint Generative AI Center of Excellence,’ says Alphabet CEO Sundar Pichai.

Continued advancements and leadership in areas such as AI, GenAI, and the cloud helped Alphabet, the parent company of Google, maintain its edge in advanced technologies, Alphabet CEO Sundar Pichai said Tuesday.

Pichai, speaking to financial analysts during the company’s fiscal year 2023 quarterly financial conference call, said Google has long led the way in using AI to improve many of its products from search to advertising to most of its consumer and enterprise products, and 2023 saw new excitement around GenAI.

“And I'm proud of how we responded responsibly with deep advances in foundation models, and a number of great launches,” he said. “We closed the year by launching the Gemini era, a new industry-leading series of models that will fuel the next generation of advances. Gemini is the first realization of the vision we had when we formed Google DeepMind, bringing together our two world-class research teams.”

Gemini was engineered to understand and combine text, images, audio, video, and code in a natively multimodal way, Pichai said.

“And it can run on everything from mobile devices to data centers,” he said. “Gemini gives us a great foundation. It's already demonstrating state of the art capabilities, and it's only going to get better. Gemini Ultra is coming soon. The team is already working on the next versions and bringing it to our products that starts with search. We are already experimenting with Gemini in search, where it's making our Search Generative Experience, or SGE, faster for users. We have seen a 40-percent reduction in latency in English in the US.”

By applying GenAI to search, Google is able to serve a wider range of information needs and answer new types of questions, including those that benefit from multiple perspectives, said Pichai (pictured above).

“People are finding it particularly useful for more complex questions, like comparisons or longer queries,” he said. “It's also helpful in areas where people are looking for deeper understanding, such as education or even gift ideas.

Beyond SGE, Google continues to use AI to make searching more accessible and intuitive, Pichai said. For instance, he said Circle to Search lets users search what they see on Android phones with a simple gesture without switching apps. Google Lens also now offers generative AI overviews.

Google’s Bard conversational AI tool that complements search is now powered by Gemini Pro, making it more capable at things like understanding, summarizing, reasoning, coding, and planning, he said.

Google Cloud revenue during the fourth fiscal quarter crossed $9 billion in revenues, and saw accelerated growth driven by the company’s GenAI and product leadership, Pichai said.

Google throughout 2023 introduced thousands of product advances including broad GenAI capabilities across its AI infrastructure, Vertex AI platform, and Duet AI, Pichai said. Google Cloud also offers the company’s AI Hypercomputer, which he called a groundbreaking supercomputing architecture that combining GPUs and GPUs, AI software, and multi-slice and multi-host technology to improve the performance and cost of training and serving models.

Customers are increasingly choosing Duet AI packaged AI agents for Google Workspace and Google Cloud Platform to boost productivity and improve operations, Pichai said.

“Since its launch, thousands of companies and more than a million trusted testers have used Duet AI,” he said. “It will incorporate Gemini soon. In Workspace, Duet AI is helping employees benefit from improved productivity and creativity.”

Google’s robust growth has been driven by strong direct and indirect channels, Pichai said.

“With ISVs, we have nearly tripled the number of co-sell deals from 2022 to 2023,” he said. “In our ecosystem, there are nearly 90,000 Google Cloud GenAI-enabled consultants, and Accenture has teamed up with Google Cloud to create a joint Generative AI Center of Excellence.”

2023 was a year of profound innovation and product momentum, Pichai said.

“Thank you to our many partners,” he said. “We succeed when our partners do. And we are grateful for the work we do together, from our partners across the Android ecosystem who were on display at CES to our deep relationships with retailers, small businesses, and advertising partners, to the next generation of AI startups and developers and many more.”

Alphabet By The Numbers

For its fourth fiscal quarter 2023, which ended December 31, Alphabet reported revenue of $86.31 billion, up 13 percent from the $76.05 billion the company reported for its fourth fiscal quarter 2022.

That included revenue from Google services including search and advertisements of $76.31 billion, up from $67.84 billion; Google Cloud revenue of $9.19 billion, up from $7.32 billion; and other revenue of $807 million, down from $895 million.

On a geographical basis, Alphabet reported U.S. revenue for the quarter of $42.00 billion, up from $37.00 billion; EMEA revenue of $25.01 billion, up from $21.76 million; APAC revenue of $13.00 billion, up from $12.00 billion; and other Americas revenue of $5.18 billion, up from $4.66 billion.

The company also reported GAAP net income of $20.69 billion or $1.64 per share, up from last year’s $13.62 billion or $1.05 per share.

For Google Cloud specifically, Alphabet reported fourth fiscal quarter 2023 operating income of $864 million, significantly better than the operating loss of $639 million the company reported last year.

For all of fiscal 2023, Alphabet reported revenue of $307.39 billion, up 9 percent over the $282.84 billion the company reported for fiscal 2022.

On a geographical basis, Alphabet reported U.S. revenue for the year of $146.29 billion, up from $134.81 billion; EMEA revenue of $91.04 billion, up from $82.06 million; APAC revenue of $51.51 billion, up from $47.02 billion; and other Americas revenue of $18.32 billion, up from $17.00 billion.

The company also reported GAAP net income of $73.80 billion or $5.80 per share, up from last year’s $59.97 billion or $4.56 per share.

Alphabet stock was down more than 5 percent in after-hours trading Tuesday to $144.56.