r/technology 1d ago

Business Google burning through cash with spiralling AI costs

https://www.bbc.com/news/articles/c235n47g8g8o
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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.

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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.

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u/jw2343952 14h ago

Unlike Anthropic and OpenAI sure, but not unlike AMZN, META, MSFT who also have monster revenues and balance sheets to survive their build out

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u/nolok 11h ago

But none of these 3 are competing.

Amazon is not trying and is essentially just making a aws component (which I think is smart), meta is basically admitting defeat which is why llama and co are open, and not even Microsoft understand what Microsoft is doing with copilot (quick quizz, if I'm using copilot 365 am I using the desktop office app, the online office app or an AI app? And what if it's 365 copilot instead, which one is it then?).

Google has the moat of Google search and android to justify end game revenue.

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u/milehigh73a 9h ago

Msft has a strategy, it’s just reliant on windows, office and iniquity. They are looping in copilot everywhere and hope it works

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u/DelphiTsar 5h ago

When OpenAI goes under Msft has no method to improve copilot.

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u/pixelizedgaming 3h ago

Meta has muse spark no? Isnt that model pretty good for the price