Google and Microsoft continued to roll out AI and generative AI-driven products as cloud revenue increased at both companies to close out 2023.
Cloud revenue at Google reached $9 billion in the fourth quarter, up 26% year over year, according to its earnings release.
Google Cloud “saw accelerated growth, driven by our gen AI and product leadership,” Chief Executive Sundar Pichai said Jan. 30 during Google’s earnings call.
During the quarter, Google Cloud launched Gemini, its multimodal large language models developed by Google DeepMind, according to Google’s website.
As Gemini rolls out, Google is planning further gen AI integration throughout its operations with focus on Search, YouTube and Cloud, Pichai said, noting that the AI is “supported by our state-of-the-art infrastructure.”
“This infrastructure is also key to realizing our big AI ambition,” Pichai said. “It’s a major differentiator for us. We continue to invest responsibly in our data centers and compute to support this new wave of growth in AI-powered services for us and for our customers.”
Royal Bank of Canada, KeyBank and Scotia Bank are among financial institutions that use Google Cloud’s platform.
Google posted in Q4:
- Revenue increased 13% YoY to $83.3 billion; and
- Total costs and expenses increased 8% YoY to $62.6 billion
Microsoft earnings
For full-year 2023, Microsoft’s cloud revenue increased 24% YoY to $33 billion, Chief Executive Satya Nadella said during Microsoft’s Jan. 30 earnings call.
“We’ve moved from talking about AI to applying AI at scale by infusing AI across every layer of our tech stack,” Nadella said.
During Q4, Microsoft launched Azure AI studio, which allows for gen AI development with Microsoft’s support, according to Microsoft’s website.
Azure has 53,000 Azure AI clients, and more than one-third of them were added to the platform in the past 12 months, Nadella said.
“Our new models of service offering make it easy for developers to use LLMs for our partners like Cohere, Meta and Mistral on Azure without having to manage underlying infrastructure,” he said.
Azure financial institution clients include U.S. Bank, Banco Santander and ING Bank.
Microsoft posted in Q4:
- Revenue increased 18% YoY to $62 billion; and
- Revenue in intelligent cloud was $25.9 billion, up 20% YoY; and
- Revenue in productivity and business process grew 13% YoY to $19.2 billion.
FTC inquiry
As Google and Microsoft continue to innovate, the FTC announced on Jan. 25 that it had ordered Google, Amazon, Anthropic PBC, Microsoft and OpenAI to provide information about generative AI efforts, according to an FTC release.
The FTC probe will dive into partnerships and investments with AI tech providers to better understand the AI competitive landscape, according to the release.
“Our study will shed light on whether investments and partnerships pursued by dominant companies risk distorting innovation and undermining fair competition,” FTC Chair Lina Khan said in the release.
The companies have 45 days from the date they receive the FTC order to respond, according to the release.
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