Alphabet achieved more than US$86 billion (74 billion Swiss francs) in revenue in the fourth quarter of 2023, an increase of 13% compared to the previous year. The world number one in online advertising generated 20.7 billion (17.8 billion Swiss francs) in net profit (+52%), according to its quarterly results press release published on Tuesday.
YouTube had revenues of US$9.2 billion (7.9 billion Swiss francs) (+15.5% year-on-year) during the holiday season, and paid subscriptions (music and/or video streaming ) now generate 15 billion dollars (12.9 billion Swiss francs). per year for Google.
Sundar Pichai, the head of the Californian group, said he was “pleased with the continued strength of online search and the growing contribution of YouTube and the cloud”, guaranteeing in the press release that his two platforms “already benefit from our investments and our AI innovations.
Microsoft also attributed its performance to this technology that has fascinated the entire world since the emergence of generative AI a year ago. Its turnover was 62 billion dollars (53.4 billion Swiss francs) in the period from October to December (+18%), for profits of almost 22 billion dollars (18.9 billion Swiss francs), an increase of a third in one year. Its cloud business particularly stood out, with 20% year-on-year growth. It is responsible for almost 42% of the company’s revenue.
“We have gone from the period when we talked about AI to a period where it is now operational on a large scale”, commented CEO Satya Nadella, quoted in the press release.
Waves of layoffs
After a year marked by large-scale social plans, inflation, a historic antitrust trial for Google and intense competition in generative AI, the two IT groups are starting 2024 in a better position, despite having recently announced further job cuts .
Sundar Pichai said he “had difficult decisions to make” to find ways to make significant investments, especially in artificial intelligence, without providing a total number.
At Microsoft, around 1,900 people will leave the Xbox console subsidiary and game publisher Activision Blizzard, acquired last year, or around 9% of the 22,000 employees allocated to video games.
Run Around Generative AI
The two American groups are involved in a frantic race to develop and deploy computer programs capable of producing text, sounds and images upon simple request in everyday language. They are one of the few companies with the proprietary computing and storage capabilities needed to run generative AI models.
Thanks to its large investments in OpenAI, creator of ChatGPT, Microsoft came out ahead, but Google defended its still very dominant position in online search tooth and nail. During a conference call with analysts, Sundar Pichai indicated that Google’s new AI model, Gemini, is already reducing wait times for results by 40% (in English and in the United States)
Bing, Microsoft’s search engine, hasn’t really gained ground, but the Redmond group, which controls almost half of OpenAI’s capital, is still riding the wave of generative AI. Its market capitalization recently surpassed 3.000 billion dollars (2.585 billion Swiss francs) on the New York Stock Exchange, dethroning Apple from first place in the world.
But the generative AI craze also raises a lot of concern about its potential abuses. The American competition authority (FTC) has just launched an investigation into the partnerships between Microsoft and OpenAI, and those between Google and Amazon with a competing start-up, Anthropic. Investors expect even higher returns on investments.