Alphabet sees a boost from AI across its businesses
Alphabet reported solid first quarter 2025 earnings, with consolidated revenues up 12% from the same time last year, driven by growth across its segments.
Google Cloud revenues jumped 28% year-on-year, to $12.3 billion.
Sundar Pichai, CEO of Alphabet, said that the company’s Cloud segment was growing rapidly, with its “differentiated, full-stack approach to AI” central to its growth. Pichai outlined three elements to that stack: AI infrastructure; AI-related research, including models and tools; and AI integration across Alphabet’s products and platforms.
In AI infrastructure, Pichai said that the company’s long-term investments in its network make it well-positioned, with a “robust and resilient” network that includes more than 2 million miles of fiber and 33 sub-sea cables, plus compute including TPUs and GPUs. He said that Ironwood, the company’s 7th-generation TPU, is the first designed specifically for inference at-scale.
Alphabet put $17.2 billion into capital expenditures during the first quarter of the year, primarily in its technical infrastructure—mostly servers and data centers, Pichai said, to support Google Services, Google Cloud and Google DeepMind. The company expects to invest around $75 billion in CapEx over the course of this year.
Pichai did note that there is a “tight demand-supply environment” in the cloud segment, and that revenue growth in coming quarters could be variable because it is correlated with deployment of new capacity. However, Alphabet expects “relatively higher capacity deployment towards the end of 2025.”
As far as AI tools, Alphabet is making artificial intelligence tools available across its platforms, with Gemini models across all 15 of its products. Pichai said that active users of Alphabet’s AI Studio and Gemini API have grown more then 200% since that start of 2025.
Pichai also specifically called out Android and AI as “two examples of how we are putting the best AI in people’s hands, making it super easy to use AI for a wide range of tasks just by using their camera, voice or taking a screenshot.”
He added that the company will be upgrading Google Assistant on mobile devices to Gemini, and that the same upgrade will take place later this year for tablets, cars, headphones and smartwatches.
In Google Search, where the company said double-digit revenue growth, Google has implemented “AI Overviews” of results and is seeing more than 1.5 billion users per month, Pichai said.
Google is also developing Gemini models for robotics, and recently introduced AI Co-Scientist, which is a multi-agent artificial intelligence research tool. Meanwhile, its Vertex AI Platform is making more than 200 foundation models available for enterprises. It’s also integrating AI deeper into its advertising tools and solutions and combine tools to help advertisers find more customers; Philipp Schindler, SVP and CBO of Google, gave the example that pet food company Royal Canin was able to do that and achieved higher conversion rates, reduced acquisition cost per purchaser by 70% and increased user value by 8%.
Alphabet’s autonomous vehicle unit Waymo also continues to see expansion. Pichai noted that Waymo recently began paid service in Silicon Valley; expanded in Austin, Texas via a partnership with Uber; and is prepping for a service launch in Atlanta, Georgia this summer. The company has also announced that it is planning Waymo ride-hailing service in Washington, D.C. and Miami, Florida next year.
