Hello Everyone,
Since the launch of ChatGPT by OpenAI, Google’s AI Strategy has been pretty mixed and frankly, fairly confusing for consumers and even developers.
Now as we head to the Spring of 2024, that seems to be changing for the better.
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I personally am no longer as confident in Google’s Search dominance as I have been in the past. I made the argument recently that changing consumer habits could threaten Google’s dominance in Search and the next few years are critical.
Since the Code Red 🚨
As you know Sundar Pichai issued a code red in Google after sudden popularity of AI and 1.5 years later Google Gemini is finally coming into its own.
In mid 2024 it definitely appears as if Google Gemini Pro 1.5 is becoming a more stable and useful product. With pivots, brand name changes and earnings on deck, I wanted to give you some resources to help you navigate Google’s AI ecosystem, news and earnings a bit better.
Google Gemini Pro 1.5 can also (April, 2024) now listen to uploaded audio files and churn out information from things like earnings calls or audio from videos without the need to refer to a written transcript.
See Google Vertex AI Pricing here
Google One AI Premium (e.g. $19.99 a month)
Google Gemini for Google Workspace Prompting Guide
Learn about Gemini 1.5
Previously with , we had already covered Google’s AI Product Strategy.
In this article after taking a look at Earnings, we’ll go even deeper.
Google’s Q1 Earnings is a Huge Success
56:45 Google’s Q1 Earnings Call.
Google’s performance in Earnings on Q1, 2024 was better than expected. Revenue was $80.54 billion for the quarter ended March 31, compared with estimates of $78.59 billion, according to LSEG data.
View CEO’s remarks.
Google Q1 Earnings Results (12 slides)
After hours (Thursday), the stock is up 11.4%.
Google’s AI Performance is Beating Peers
Q1 Earnings was Positive for Alphabet
Executive Summary of Google’s 1st Quarter Earnings 2024
Listen to the Earnings Summary, 2min. 3 seconds.
➜ Google’s Revenue increased 15% from a year earlier, the fastest rate of growth since early 2022.
➜ Operating income in Google’s cloud business more than quadrupled to $900 million.
➜ The company also announced its first dividend and a $70 billion buyback.
➜ Net income jumped 57% to $23.66 billion, or $1.89 a share, from $15.05 billion, or $1.17 a share, a year earlier.
➜ Google reported total ad sales of $61.66 billion — up from $54.55 billion a year ago.
➜ The company has been investing heavily in artificial intelligence, adding generative AI features to search and other services to ensure that consumers continue using Google tools even as the way they seek information online changes.
By the Numbers 🚀
The company reported adjusted earnings per share of $1.89 versus consensus estimates of $1.53.
Google Cloud revenue jumped 28% to $9.57 billion in Q1 2024, bolstered by the demand for generative AI tools that rely on cloud infrastructure, services and apps.
Google Cloud’s operating income grew nearly 5x to $900 million, up from $191 million. This appears to show that Google’s AI Strategy is booting demand for Google Cloud as was intended.
Google Search and other revenue climbed 14.4% to $46.15 billion in the first fiscal quarter. YouTube revenue was up 20% year-over-year to $8.09 billion.
Alphabet’s whole-org revenue stands at $80.5 billion, an increase of 15% year-over-year, with net income coming in at $23.7 billion (up 57%).
All to say that on paper Google’s AI Strategy is translating well to Earnings in 2024 thus far.
This graph by Yahoo Finance helps us visualize Google’s Earnings better.
Google’s AI Product Strategy
Finally we get to Google’s AI Ecosystem. If you like infographics like we see below, I recommend subscribing to .
By
Earlier this month, at Google Cloud Next, the company announced and released new products and features to expand and differentiate its AI offerings for developers. And in the past few months it has been rolling out AI assistants and companions for its consumer products. This is an update to Google’s strategy overview that reflects the latest and most compelling ML and AI products and their value proposition.
Google has a comprehensive AI strategy across its entire developer and consumer product portfolio. The key themes for its capabilities are “scale”, “modularity and openness” and “multi-modality”.
The scale value proposition refers to the vast quantities of data and bandwidth that Google’s products can process for any applications across the world, as well as the 1 M tokens context window that can be accessed through Gemini 1.5 Pro. The modularity and openness theme refers to GCP’s compatibility with other cloud platforms, developer and MLOps tools. Multi-modality speaks to Gemini 1.5 Pro’s ability to handle text, images, videos and audio, as well as the AI assistants integrated as features into products such as Workspace and Chrome.
The Google Cloud Platform has been given a General Purpose positioning as “The New Way to Cloud” and its value proposition centers on Google’s vast, distributed server network that can process large amounts of data and bandwidth with low latency. It is supported by a variety of hardware chips, including Google’s own TPU, now on version 5.
Vertex AI is the fully-managed developer environment provided by Google that works with GCP, as well as other platforms.
It includes three key areas:
The AI Studio with MLOps and pipeline tools for the development of AI back-end systems and applications
The Agent Builder – a no- and low-code environment for training and deploying AI models
The Model Garden, which contains first-party models (see below) and dozens of 3rd-party ones, including the Claude Series from Anthropic, the Llama series from Meta and Stable Diffusion from Stability AI
The Age of Agentic AI is Coming
At Google Cloud Next, the company featured six types of agents that can be built with its developer tools. They are:
Customer Agents – applications to facilitate customer interactions through natural language across their lifecycle, from enabling purchases, to managing deliveries and handling customer support inquiries
Employee Agents – systems that add AI capabilities to employee management tools, such as HR, IT, Benefits, as well as to internal tools that enable greater employee productivity
Creative Agents – applications that can generate content in all of the modalities supported by Gemini (text, images, video, audio) for marketing, sales and business productivity documents
Data Agents – to facilitate data and business intelligence aggregation, analysis and visualization, from internal and external sources
Code Agents – that assist developers with writing and debugging code
Security Agents – to identify and mitigate threats
Google published a list with 101 examples of these types of agents here.
“Ground with Google Search” is a new feature that is available for the development of agents through GCP to assist with Retrieval Augmented Generation systems that can now leverage Google’s search engine, in addition to the company’s own enterprise data.
Google’s flagship AI model, Gemini 1.5 Pro is a multi-modal, 1M context window model that can process 1 hour of video, or 30k+ lines of code, 11 hours of audio or 700k works at a time. It is available through the Model Garden and also integrated into a variety of developer assistants that are available through GCP, Vertex AI, as well as 3rd-party IDEs.
They include:
Code Assist – for software delivery
Cloud Assist – to manage the application lifecycle in the cloud
Security tools – to identify and handle threats
BigQuery – to fast-track data analysis
Looker – for business intelligence
Android Studio – for Android app development
Additionally, Project IDX, an experimental initiative, currently in Preview, aimed at bringing the full-stack, multiplatform app development workflow to the cloud, is powered by AI features.
Gemini is also deployed as the back-end to a large variety of AI features across Google Workspace, Search and Chrome.
Google Search now offers an experimental generative feature that answers the user query in natural language at the top of the search results page. Workspace is also offering AI features that help users compose, edit, summarize and create content in text, image or video form in the respective apps, from Gmail to Docs and Slides.
When it comes to meetings, the AI Meetings and Messaging add-on will give users access to Google Meet features such as studio look, studio lighting, studio sound, and note-taking. In the future, AI Meetings and Messaging will also provide access to Gemini features in Google Chat features such as on-demand conversation summaries and automatic translation of messages.
Google Vids is a new AI-powered video creation app for work, scheduled for release in June 2024. It can generate a storyboard for editing, it pieces together drafts with suggested scenes from stock videos, images, and background music and helps create voiceovers.
Another Workspace addition is an AI-powered security add-on that allows IT teams to automatically classify and protect sensitive files company-wide in Google Drive. This capability enables continuous evaluation, classification, and protection of existing and new files in Drive, for all of employees in an organization.
Chrome’s AI features enable users to manage and organize their tabs, create new browser themes and generate content for their web browsing, such as for emails, forms and writing product reviews.
The latest announcements and releases made AI a more present and comprehensive presence across Google’s portfolio of developer, enterprise and consumer applications. It is an opportunity for its current users to decide how they want to use and deploy AI for their lives and workloads and for Google to learn what features work well and what services need improvement. It is also a change for the company to capture more marketshare, particularly in the cloud computing and enterprise space, where it is competing with AWS and Microsoft’s Azure.
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