The success of both Google and Microsoft reflects a broader trend across the tech industry, where AI is becoming a key catalyst for innovation and profitability.
Artificial Intelligence (AI) prominence is on full display as tech giants including Alphabet Inc (NASDAQ: GOOGL) through its search engine Google and Microsoft Corp (NASDAQ: MSFT) revealed their second-quarter (Q2) earnings reports. Notably, artificial intelligence as a tech stack played a pivotal role in their success.
Google, Microsoft Enjoys AI Boom
Google’s parent company, Alphabet Inc., announced robust earnings driven largely by AI-powered services. As per reports, Alphabet’s quarterly sales attained $80.5 billion, a 15% increase from the previous year, and profit increased by 36% to $23.7 billion. Similarly, Microsoft revealed a 17% increase in revenue, soaring to $61.9 billion, from the previous $52.9 billion in 2023. Also, the company witnessed a 20% surge in profits, reaching $21.9 billion.
Also, the company’s cloud computing segment, Azure, experienced significant expansion fueled by AI-driven innovations. Azure’s AI capabilities empower businesses with advanced analytics, machine learning, and cognitive services. This enabled clients to harness data for strategic decision-making and operational efficiency.
The success of both Google and Microsoft reflects a broader trend across the tech industry, where AI is becoming a key catalyst for innovation and profitability. AI-driven solutions are revolutionizing sectors ranging from healthcare to finance, streamlining processes, and delivering transformative outcomes
Recall that last year, Accel, a venture capital firm published its annual Euroscape Report noting the benefits tech companies derived from AI use. According to the report, several major companies, including Apple Inc (NASDAQ: AAPL), Microsoft, Nvidia Corp (NASDAQ: NVDA), and Amazon.com Inc (NASDAQ: AMZN) rose 36% in the past year, adding $2.4 trillion.
Likewise, Amazon introduced AI to boost its delivery speed. According to the American multinational e-commerce company, AI will evaluate the transportation of goods, look into mapping and planning routes, and variable factors like weather. With AI, Amazon products will be delivered to a consumer on the same or the next day.
AI Products and a “Reality Check” Prediction
Since OpenAI launched ChatGPT, several tech giants have designed or developed similar AI tools. Swedish fintech startup Klarna recently announced an image recognition tool that helps users identify goods for purchase. Users can get information about desired items by pointing their phones at the products.
Also, Microsoft introduced several AI products aimed at healthcare, including the Azure AI health Bot. These tools help patients and healthcare staff improve healthcare’s effectiveness and general delivery.
Although most AI forecasts are bullish, some analysts predict a reality check this year. According to leading tech research firm CCS Insight, the interest and hype AI is currently enjoying will be replaced by practical challenges. CCS Insight believes that the cost and risk of AI would become more pronounced.
Also, according to the firm’s Chief Analyst, while AI will help increase productivity levels, problems like the cost of running applications using Graphics Processing Units (GPUs) and concerns like ethical problems and job displacements might become significant issues in 2024.
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