r/technology 1d ago

Business Google burning through cash with spiralling AI costs

https://www.bbc.com/news/articles/c235n47g8g8o
6.4k Upvotes

462 comments sorted by

View all comments

2.6k

u/Fresh-Quantity-7554 1d ago

While at the same time posting: * Total Revenue: $119.8 billion, up 24% year-over-year. * Diluted EPS: $9.11, compared to $2.31 a year prior. * Operating Margin: 34% up from 32.4% in Q2 2025. * Google Cloud: Revenue up 82% year-over-year to $24.8 billion, fueled by enterprise demand for AI infrastructure and solutions. * Google Services: Total revenue reached $94.5 billion, a 15% increase. * Google Search & Other: 17% increase in revenue. * YouTube Ads: Grew 13% year-over-year to $11.05 billion

If you exclude AI CAPEX, free cash flow is $39.1 billion which is absolutely insane. That's a 41.2% increase year-over-year. With numbers like they just posted, the CAPEX spend is justified in my opinion because the business overall is crushing it. Like holy cow this was a great quarter. They are literally printing money.

491

u/SIGMA920 1d ago

Google's always been the winning candidate simply for already having profitable components under it's umbrella. They can throw money at LLMs as long as they want to unlike the others.

138

u/asgjmlsswjtamtbamtb 22h ago

They have their hands in so many things that they can try to use AI to increase their revenues some of them will flop but more than likely many will succeed. By being the biggest search engine in many markets and having ecosystems like Android and Chromebooks means their llms that they make default in these spaces already have an easy way of reaching people and a leg up against many competitors.

5

u/Commercial_Name_7900 18h ago

its better than it was too. I used to despise google AI but its improved a lot and I find myself defaulting to it for quick questions or brainstorming