Prabhakar Raghavan


Google has been reorganizing to try and stay ahead in the AI arms race as more users move away from traditional internet search to find information online.

In Alphabet’s upcoming earnings report on Thursday, Wall Street is expecting a second straight quarter of year-over-year revenue growth in the low teens. While that marks an acceleration from the few quarters prior, the numbers are also in comparison to some of Google’s weakest reports on record.

Even though Alphabet reported better-than-expected revenue and profit for the fourth quarter, ad revenue trailed analysts’ projections, causing the company’s shares to drop more than 6%. Meanwhile, the AI boom is forcing a renewed focus on investments.

“We’re in a new cost reality,” Raghavan said. With generative AI, the company is “spending a ton more on machines,” he said.

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