AI AND ML<\/p>\n
Yet the Chocolate Factory is also buying more third-party compute capacity to handle demand for the G-Cloud<\/p>\n
Google\u2019s parent company Alphabet is managing its fleet of AI accelerators to prioritize research on artificial general intelligence, rather than renting them all to customers.<\/p>\n
CEO Sundar Pichai revealed the company\u2019s priorities during its second quarter earnings call, during which the company confirmed it has delivered on its plan to sell its tens<\/a>or <\/a>processing units<\/a> (TPUs) to some customers. In response to news of those sales, Goldman Sachs analyst Eric Sheridan asked how Alphabet balances demand from customers who want to buy its TPUs and the web giant\u2019s own need for processing power.<\/p>\n \u201cIn terms of allocating our TPUs \u2026 our first priority is making sure we are allocating what we need to compete at the frontier in terms of AGI development,\u201d Pichai replied, referring to Artificial General Intelligence \u2013AIs that possesses human-like intelligence.<\/p>\n \u201cThat is the foundation for everything we do,\u201d Pichai added.<\/p>\n Another analyst, Mark Shmulik of Bernstein, revisited the matter by asking how Google allocates processing capacity among its search business, cloud operation, and model training efforts.<\/p>\n \u201cOn allocation, I think the baseline with which we start is what it takes to continue AGI development at the frontier,\u201d Pichai responded. The CEO said Alphabet is also \u201cprioritizing our core product areas like Search, YouTube, et cetera, as well as Cloud.\u201d And in the G-Cloud, Google is \u201cprioritizing the compute to make sure we can serve our models in the context of Vertex and Gemini Enterprise, and our core solutions, be it data analytics and cybersecurity.\u201d<\/p>\n \u201cOur core services for our core products across consumers and enterprises is where the compute is primarily going, and that\u2019s how we think about it,\u201d the CEO added.<\/p>\n Google\u2019s core services are going gangbusters.<\/p>\n Google Cloud revenue leapt 82 percent year over year, to $24.75 billion for the quarter, and delivered an $8.8 billion profit which represented 214 percent growth. The Big G said that growth came from \u201cstrong demand for AI infrastructure and AI solutions.\u201d There\u2019s probably more to come as the G-Cloud now has $514 billion of cloudy backlog on the books, meaning customers have signed up for services they\u2019re yet to consume.<\/p>\n Search revenue grew 17 percent and YouTube ads grew 13 percent.<\/p>\n When generative AI came along some pundits suggested it could threaten Google\u2019s search ads biz. That was not a good take because Pichai said the company\u2019s AI Mode for search is \u201cdriving an incremental increase in Search queries overall.\u201d<\/p>\n AI search needs specialist hardware that is expensive to buy and run. Pichai said Google is on top of that. \u201cThanks to our engineering and hardware optimizations, this quarter we reduced the cost of AI Mode responses to its lowest level since launch, even as we\u2019ve brought more advanced AI capabilities.\u201d<\/p>\n Google continues to spend megabucks on AI infrastructure \u2013 CFO Anat Ashkenazi said the company now plans to spend between $195 billion and $205 billion this financial year, up from a previous estimate of $180 billion to 190 billion.<\/p>\n Ashkenazi said Google can\u2019t get all the kit it needs due to what she described as \u201cthe supply-constrained environment.\u201d Google therefore plans to \u201cexpand the use of third-party capacity in Q3 as a bridging strategy while we build out more internal capacity.\u201d<\/p>\n Pichai said buying bridging capacity will help Google to land monster cloud clients.<\/p>\n \u201cThere are very, very large customers of ours on Cloud who we are trying to support them through this extraordinary moment,\u201d the CEO said. \u201cThe incremental opportunities they are bringing to us, while a short-term cost over a few months may be very high, in the lifetime of the deal, as we bring more capacity on, is highly ROI positive.\u201d<\/p>\n \u201cThose are factors we are taking into account. Are you willing to take upfront six-month deal to be able to serve that customer in what is a multi-year opportunity, where the margins and the returns are very, very attractive over that multi-year horizon?\u201d<\/p>\n Alphabet\u2019s quarterly revenue landed at $119.8 billion, up 24 percent year over year. Operating income hit $40.8 billion, up 34 percent.<\/p>\n Yet even those torrents of money couldn\u2019t stop Google\u2019s free cash flow landing at -$5.9 billion \u2013 \u00a0the first time the company hasn\u2019t had spare cash to splash since 2004. Investors seem not to like that and sent the price of the company\u2019s shares down by four percent in after hours trading. \u00ae<\/p>\n","protected":false},"excerpt":{"rendered":"AI AND ML Yet the Chocolate Factory is also buying more third-party compute capacity to handle demand for…\n","protected":false},"author":2,"featured_media":593610,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":["post-706827","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/706827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=706827"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/706827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/593610"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=706827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=706827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=706827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}