"Sundar Pichai, CEO of Google's parent company Alphabet, told investors that the web giant's recently-released search update that presents results as prose written by AI instead of just a list of links "is already driving incremental total query growth" and "driving an expansionary moment for Search." It's also driving more revenue. Alphabet's advertising haul rose 12 percent year-over-year to hit $74.2 billion for Q3."
"AI also helped Meta to a strong quarter. CEO Mark Zuckerberg pointed [PDF] to AI-powered recommendations leading to users spending more time on the company's social networks. "Our ads business continues to perform very well, largely due to improvements in our AI ranking systems," he added, before revealing "the annual run-rate going through our completely end-to-end AI-powered ad tools has passed $60 billion." Meta is also growing, fast, with Q3 revenue of $51.25 billion representing 26 percent year-over-year improvement."
Generative AI features drove significant growth at Google and Meta. Google's search update presenting AI-written prose increased total query growth and expanded Search, and Alphabet advertising revenue rose 12 percent year-over-year to $74.2 billion in Q3. Google Cloud revenue reached $15.15 billion, up 33 percent year-over-year, contributing to Alphabet's first $100 billion quarter at $102.34 billion, a 16 percent increase. Meta's AI-powered recommendations increased user time and improvements to AI ranking systems strengthened ad performance; Meta Q3 revenue was $51.25 billion, up 26 percent year-over-year. Both companies plan substantial increases in AI infrastructure spending.
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