Google, Microsoft top expectations as AI rivalry heats up
Google parent company Alphabet beat market expectations in the first quarter of 2023 with a net profit of $15 billion, the company said on Tuesday, in a sign that the search engine behemoth is regaining its footing.
The tech titan has found itself under pressure due to a general slowdown in advertising spending, over-hiring during a Covid-era boom and a major challenge by Microsoft on artificial intelligence.
Its quarterly revenue came in at nearly $70 billion, a billion better than expected by analysts, and in the same three-month period that the company said it would lay off 12000 staff, or six percent of its workforce.
Microsoft's results for the first three months of the year also pleased investors on Tuesday, lifted by its industry-leading business cloud products.
The company founded by Bill Gates reported profit of $18.3 billion on revenue of $52.9 billion as Cloud and AI more than offset drops in revenue from licensing Windows software to computer makers, as sales suffer in that market.
Most market attention was on Google, which became a focus of worry when Microsoft-backed ChatGPT was released and quickly went viral late last year. The Windows maker has added the technology to its Bing search engine and office software.
The search giant has since rushed out Bard, its own version of the language-based AI, but the release was seen as clumsy and has so far disappointed observers and company insiders, according to media reports.
"We'll continue to incorporate generative AI advances to make search better in a thoughtful and deliberate way," Google chief Sundar Pichai said during an earnings call.
"And we will test and iterate as we go because we know that billions of people trust Google to provide the right information."
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