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Alphabet broke its revenue record thanks to artificial intelligence | Economy

Google group revenues and profits accelerated in the latter part of 2023. Together with artificial intelligence and strong demand for digital advertising, the company’s turnover increased by 9% over the year, to $307.394 million (about 283,400 million euros at current exchange rates), exceeding the 300,000 million revenue mark for the first time, according to reports published by the company in Tuesday.

The group’s net profit, in turn, increases by 23% to $73.795 million, which is slightly below the record results of 2021, partly due to extraordinary expenses on staff reductions and office rationalization. Operating results broke records, rising 13% to $84.293 million.

The fourth quarter of the year was particularly stellar, with very strong growth in revenue (13%, to $86,310 million) and profit (52%, to $20,687 million). That was helped by growth in digital advertising, both in the search business and on YouTube, as well as an acceleration in its cloud computing business, driven in part by artificial intelligence, which disappointed in the third quarter. However, the market expected more, and investor reaction was somewhat skeptical, at least initially. Its rival Microsoft continues to grow stronger thanks to Open AI. Alphabet has lagged Microsoft and Apple somewhat in the stock market, although its value has risen more than 50% over the past year.

Sundar Pichai, CEO of Alphabet, said in a statement: “We are pleased with the continued strength of search and the growing contributions of YouTube and Cloud. Each of them is already benefiting from our investments and innovations in artificial intelligence. We are entering the Age of Gemini and the best is yet to come.”

“We ended 2023 with very strong fourth-quarter financial results, with consolidated fourth-quarter revenues of $86 billion, up 13% year-over-year. “We remain committed to our work to sustainably reengineer our cost base while investing to support our growth opportunities,” said Chief Financial Officer Ruth Porat.

The Google group, which dominated the Internet for years, is the target of a major antitrust case. In its results, it reported traffic acquisition costs of $13.986 million in the fourth quarter. As it became known from the trial taking place in Washington, a very important part of this amount goes to Apple for making Google the default search engine for browsers on its phones, tablets and computers. These agreements are being challenged in the case.

Google’s leadership is threatened by new competition as the rise of generative artificial intelligence has allowed companies like Microsoft and OpenAI to offer programs that answer user questions in a more conversational way, such as the popular chatbot ChatGPT, which appears to be a threat. to traditional searches.

The company announced workforce cuts a year ago, causing it to record $2.1 billion in employee severance and related benefits in 2023. It is also taking steps to optimize its office space around the world, resulting in termination payments and exit costs. in the fourth quarter was $1.2 billion, bringing the annual total to $1.8 billion, not including another $269 million in accelerated rents and accelerated depreciation.

Finally, for the year as a whole, the workforce grew from 190,234 at the end of 2022 to 182,502 at the end of the year. Although Alphabet announced layoffs of 12,000 people, the net workforce reduction, including new hires, ended up being about 7,700.

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