‘Lots More to Come,’ Says Pichai About Alphabet’s AI Plans

Google will turn 25 in September.

The impact the search giant has had over the past 2½ decades on the way people around the world live and interact with each other by using the internet is impossible to overstate.

But is the business fully prepared to capture the momentum of the latest technical inflection point, artificial intelligence (AI)?

Information is only as useful as it is easy to access, and Google revolutionized the way information could be organized, queried and accessed.

However, industry observers believe Alphabet has admittedly lost round one of the generative AI battle to ChatGPT and OpenAI, while its search business continues to feel heat from competitors like Microsoft.

CEO of Alphabet and Google, Sundar Pichai, disagrees — telling investors on Tuesday’s (April 25) first quarter 2023 earnings call that “advancements in AI are driving [Alphabet’s] opportunity,” and calling the potential of their far-ranging applications “incredible” for consumers, partners, and Alphabet’s own internal business operations.

“We introduced important product updates anchored in deep computer science and AI. Our North Star is providing the most helpful answers for our users, and we see huge opportunities ahead, continuing our long track record of innovation,” Pichai said.

Alphabet’s cloud business for the first time since its launch reported a profit, raking in $191 million for the quarter.

“We are pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud,” Pichai noted to investors.

Alphabet beat both earnings per share and revenue estimates.

Read more: Can Humanity Ever Match, Much Less Control, AI’s Hyper-Rapid Growth?

Reaching Full Potential With AI

As PYMNTS reported, the AI-focused DeepMind and Brain teams from Google Research have been brought together into a new group called Google DeepMind that is focused on “a new era of AI.”

Previously, DeepMind results were reported within the catch-all Other Bets segments.

“This change does not affect first quarter reporting. The group, called Google DeepMind, will be reported within Alphabet’s unallocated corporate costs beginning in the second quarter of 2023,” the company reported.

The company is leveraging AI applications across the majority of its product lines, including advertising and YouTube shorts and reflecting DeepMind’s increasing AI-driven collaboration with Google Services, Google Cloud, as well as Other Bets moonshots.

“It is an exciting time, and we see an opportunity across the breadth of what we do at Google to improve experiences using AI,” Pichai told investors on Tuesday’s call.

PYMNTS has previously reported on how Google is planning to add generative artificial intelligence (AI) to its advertising operations.

“We’ve made good progress across all areas,” Pichai said.

The Google and Alphabet CEO called AI and its implications across business and society “more profound than fire or electricity” in a televised interview earlier this month.

He has previously said the technology will “impact every product across every company.”

“Pretty much every organization is thinking about how to use generative AI” to achieve efficiencies, Pichai told investors.

“We use AI across almost every internal financial task,” said Ruth Porat, CFO of Alphabet and Google.

Read more: Generative AI Tools Center of New Regulation-Innovation Tug of War

Accelerate Innovation and Impact

AI is the new battlefield between tech giants, and after Bard’s botched debut, Alphabet stock lost around $100 billion of its market value.

Pichai repeatedly emphasized Alphabet’s commitment to the “highest standard of information integrity” when describing what the company saw as the “AI opportunity.”

Some observers believe that the market may underappreciate the strength of Google’s existing large language models (LLMs).

Alphabet’s latest natural language model, PaLM, demonstrates breakthrough capabilities in language, reasoning and code tasks, while breakthroughs in “chain of thought” prompting are helping build systems that can perform multistep reasoning and break down complex problems into smaller tasks and remove the need for manual interventions, according to executives on the earnings call.

Still, as companies pour billions into AI they are cutting back on spending elsewhere.

Pichai called 2022 a year of “agility and reinvention,” and at the start of the year Alphabet said it was eliminating 12,000 jobs, representing about 6% of its workforce.

Alphabet separately also recently halted construction of a proposed 80-acre campus in California.

Alphabet’s competitors Meta and Apple are set to release their own earnings on Wednesday and Thursday, respectively.