The shift towards AI-driven advertising has been a major factor in the growth of Alphabet Inc., parent company of Google, with digital formats dominating 72% of total ad revenue by 2029. Alphabet's second-quarter earnings report showed a 19% increase in earnings to $28.2 billion and a 14% rise in revenue to $96.4 billion, surpassing analyst projections.
CEO Sundar Pichai attributed this growth to the company's leadership in AI, which is positively impacting every part of its business. The company's Cloud division saw a 32% increase in revenue to $13.6 billion, driven by demand for computing power and other services fueled by the AI boom. The launch of Google's Gemini chatbot competitor has also contributed to the company's advertising revenue growth, attracting over 450 million monthly users.
Alphabet's shares rose 3% ahead of the bell on Thursday as the company's earnings highlighted a significant increase in AI spending and returns. The tech giant has raised its 2025 capital spending forecast to $85 billion, signaling plans to further invest in meeting growing demand for cloud services and staying competitive in the AI market.