Alphabet boosted by AI, cloud demand as spending needs skyrocket
artificial intelligence (AI)
products boosted quarterly sales, and now requires an extreme increase in capital spending – heightening pressure on the company to justify the cost of keeping up in the AI race.
Google's
parent company said 2025 capital expenditures will be $85 billion (€72 billion), or $10 billion greater than an earlier forecast. Although Alphabet beat expectations for second-quarter revenue and profit, its stock initially sank in after-hours trading, then rebounded after chief executive Sundar Pichai explained that the investments are necessary in order to keep up with customer needs. 'Our AI infrastructure investments are crucial to meeting the growth in demand from cloud customers,' he said on a call Wednesday following the report.
As Microsoft, start-up OpenAI, Meta Platforms and others continue to pour money into AI, Alphabet has little choice but to follow suit, analysts said. The race is particularly urgent for Google: competitors are building chatbots that may eventually appeal to consumers more than its flagship search product. 'Google's hand is forced by OpenAI to spend tremendously on AI's infrastructure and applications,' said Nikhil Lai, an analyst at Forrester.
The recent quarter was strong almost across the board for Alphabet. Sales, excluding partner payouts, climbed to $81.7 billion, Alphabet said in a statement, topping analysts' projections of $79.6 billion on average, according to data compiled by Bloomberg.
Alphabet is counting on its core search advertising juggernaut and growing cloud computing business to support its spiralling spending on AI. Employees are under pressure to bring AI products to market faster, from new modes of search to tools for cloud customers. 'We are seeing significant demand for our comprehensive AI product portfolio,' Pichai said.
Chief financial officer Anat Ashkenazi said capital expenditures will rise yet again next year, without providing details.
The strain of the AI race could be spotted elsewhere in the company's results. Ashkenazi attributed the company's 16% jump in spending on research and development to increases in pay packages for key employees. Meta has been making unprecedented compensation offers as it seeks to woo researchers for its superintelligence lab, driving up the price for key employees across the industry.
Earlier this month, Google struck a deal to pay about $2.4 billion for top talent and licensing rights from artificial intelligence coding start-up Windsurf. Yet money isn't the only consideration for researchers when deciding where to work, Pichai said.
Top talent in the field want 'to really be at the frontier driving progress,' in addition to craving access to computing power and talented peers, Pichai said. 'It's a combination of all of that and using it to drive impact. And I think we are pretty competitive on all those fronts.'
Google's cloud-computing unit reported quarterly revenue of $13.6 billion and operating income of $2.83 billion, topping analysts' projections. Google remains in third place in this market, after Microsoft and Amazon, but the company's prowess in AI has helped it score client wins. The unit is widely viewed as Alphabet's strongest source of growth as the main search business matures.
The centrepiece of the cloud offensive is Gemini, the AI model that Google is rapidly weaving across its vast product portfolio, and pushing to enterprise clients. Many AI experts were impressed by the release of a new version of the Gemini model earlier this year, but it still trails OpenAI's ChatGPT in adoption by most estimates.
As Google faces mounting competition, it's also facing penalties for being dominant. Google's primary businesses are under threat of a break-up after US federal judges ruled that the company is maintaining illegal monopolies in search and some ad technology. Next month, Judge Amit Mehta is expected to deliver an order on the measures Google must take to restore competition in online search, though Google has said it plans to appeal the ruling.
YouTube, Google's video site, posted $9.8 billion in second-quarter ad revenue, exceeding analysts' estimates of $9.56 billion. The unit, which draws most of its revenue from advertising, was expected to perform well thanks to its lead in livingroom streaming and heavy investments in podcasts.
Alphabet's Other Bets, a collection of futuristic businesses that includes the self-driving car effort Waymo, generated $373 million in revenue, missing estimates for $429.1 million. Ashkenazi said Alphabet will continue devoting more resources to Waymo.
Alphabet has been aggressively expanding the operations of Waymo, which may soon face increased competition as Tesla ramps up its robotaxi business. Earlier this month, Waymo more than doubled its service area in Austin, Tesla's home base, and said it would start collecting data in New York City in pursuit of a permit for testing.
'The team is testing across more than 10 cities this year, including New York and Philadelphia,' Pichai said. 'We hope to serve riders in all 10 in the future.'
Google isn't alone in feeling pressure to show success from AI investment. Shortly after Pichai's Waymo comments, on the Tesla earnings call, chief executive Elon Musk started slamming Google's AI prowess. He said Tesla was 'actually much better than Google.' Investors might disagree; Tesla's shares fell. – Bloomberg
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The Irish Sun
8 hours ago
- The Irish Sun
I found £6,000 of savings in 10 MINUTES with two dupe-hunting Google tricks that transform your home, garden & wardrobe
I LOVE a deal and there are loads online – but who has the time to scour the web looking for savings? That's why I got a robot to do it for me. 27 The Sun's tech editor Sean Keach has been hunting for deals online Credit: Sean Keach To see if I could save some cash, I set Google's AI systems to work, hunting for product alternatives, "dupes", and lookalikes . It managed to track down thousands of pounds of savings in a matter of minutes using a clever combination of free online features . I used two different tricks – one using Google Gemini and the other using Google Lens. Gemini is Google's chatbot. You can find it And Google Lens is a special version of Google Search that you'll find inside the official Google app on your phone. You can take or upload a photo, and then Google will hunt for it (and lookalikes) online. Just tap the camera icon in the app. Both of these tools are perfect for dupe-hunters looking to save a bit of cash. They can identify your product and trawl the web to find items that look just like it – only at a much lower price. First, I tried it on a few products in my house to see if I could find places where I would have saved money . But I also had a go with ritzy items I'd seen online – all in a bid to find bargain versions of the same products. Let's start with what I had at home first. Google's Gemini AI app lets you chat out loud with shockingly humanlike virtual helper HOME ITEM #1 – LIVING ROOM LAMP I love my living room lamp. It's the Made Java Arc Overreach Floor Lamp, which normally retails for £179. That's a fair sum of money, but it looks great. For this, I had better luck with Google Gemini. I asked for lookalike lamps that didn't cost as much, and it served me up with three decent options. 27 You can chat to Google about products – and hunt for cheaper ones Credit: Sean Keach 27 Google's Gemini chatbot can serve up lookalike products Credit: Sean Keach 27 This isn't an exact dupe but it's far cheaper than the one we bought Credit: Studio / The Sun Two looked reasonably similar and came in at £59.99 and £84.99. Honestly, I would've been happy with either. But there was a near-identical one up for £109.99 that would easily double up as the real thing. Nice work, Gemini. Potential Saving: £119.01 27 This attractive lamp is similarly styled but far cheaper Credit: Online Light / The Sun 27 This looks almost identical to the lamp we actually bought Credit: Mano Mano / The Sun HOME ITEM #2 – BROWN JACKET Next up, I snapped a pic of my Wrangler Buffalo Trace jacket. This one cost me about £120. This time, I plugged it straight into Google Lens. What I thought was interesting here was that I took a pretty rubbish photo of the jacket. And not only did it find a very similar alternative on Asos, it also identified the actual jacket and listed that too. Spooky. The Asos option was just £45. An absolute steal. It's not whiskey-themed, granted – but what a bargain. Potential Saving: £75 27 Google Lens can quickly identify an item in an image Credit: Sean Keach 27 Google Lens quickly serves up cheaper alternatives Credit: Sean Keach HOME ITEM #3 – ORANGE POUFFE We have an orange pouffe that works as a footstool or a spare seat if we've got a load of people round. It's the Dunelm Eliza Pouffe Orange Umber, which goes for £40 online and in stores. 27 We bought this pouffe, but there were cheaper options online Credit: Sean Keach 27 This similar pouffe is on sale for just £25.99 Credit: RUComfy / The Sun Google Lens managed to find one that looked almost identical (but a slightly different shade of orange) for £25.99. But I actually prefer a slightly different design that showed up on Google Lens via Etsy, which was only £22.99. So there's a small saving, but the original was already pretty cheap, in my opinion . Potential Saving: £17.01 27 There was en even cheaper Etsy option that looks very stylish Credit: Etsy / Kosiproducts / The Sun HOME ITEM #4 – DINING CHAIRS Another Dunelm buy for us was our dining chairs. We've got the Dunelm Shea Set of 2 Dining Chairs, which are £119. We have six chairs, so that's £357. 27 Google Lens gets to work right away, hunting for similar products Credit: Sean Keach Google Lens managed to find a fairly similar-looking pair from Debenhams for £100 – so that would've been £300 for six seats. If we'd gone for those, it would've saved us £57. It's not a massive saving, and honestly, I prefer the ones I bought. But if I were really sticking to a budget, every little helps. Potential Saving: £57 27 Debenhams had a pair of very similar chairs for just £100 Credit: Debenhams / The Sun ONLINE ITEM #1 – GREEN SOFA We recently went sofa hunting, and it was hard not to be impressed by Swoon. They've got some lovely gear. I was just looking online and found a very tempting three-seater Swoon sofa in green (or "fern") velvet, sold by John Lewis. I love it, but it's hardly cheap at £2,139. 27 This Swoon sofa is dreamy – but it's priced very high Credit: John Lewis / Swoon / The Sun My first attempt was with Gemini, but it struggled to come up with much, no matter how I worded my prompt. It showed a couple of sofas that didn't look similar enough. 27 Google Gemini suggested this sofa, but it wasn't quite right Credit: Daals / The Sun 27 Another Google suggestion missed the mark – although it was cheaper Credit: Habitat / The Sun But when I tried it with Google Lens, I spotted two very nice options. There was a pricier sofa from Brand Alley at £1,599 that looked good. But my favourite was the even cheaper Lutyens Moss Green three-piece sofa from Daals, which was a thriftier £1,399.99. It's beautiful, and far closer to the original Swoon sofa. Potential Saving: £739.01 27 Google Lens tracked down this bargain offering, though it's not quite as stylish as the Swoon one Credit: Brand Alley / The Sun 27 This Daals option undercut Swoon significantly, and it's beautiful to boot Credit: Daals / The Sun 27 Google Lens is a savvy shopper's dream Credit: The Sun ONLINE ITEM #2 – OUTDOOR DINING SET Next, I went really posh. We recently moved and we haven't got any garden furniture yet. There's a very roomy outdoor set from Bridgman called the Richmond Modular Sofa Set, but it costs a frankly bank-breaking £5,299. Ouch. 27 This posh garden set would look you've got the room for it Credit: Bridgman / The Sun 27 You'll need a big budget for it too Credit: Bridgman / The Sun Straight to Google Lens I go. One option was a decent (but smaller) option for £1,399 from another retailer. 27 This one cost £1,399, but I was hopeful I'd find something even cheaper Credit: Honeypot / The Sun But I was more impressed by a similarly spacious £1,185 alternative that included a fire pit table. Sadly, I couldn't find anything that matched the original bang on. So maybe I went too posh here. However, I do think that the cheaper set looked very nice, and I could do a lot with the spare £4,000 if I were buying this. Potential Saving: £4,114 27 This more budget-friendly option included a fire pit Credit: House of Glitz and Glamour / The Sun 27 Google Lens looks for products at a whole range of prices Credit: The Sun ONLINE ITEM #3 – COFFEE TABLE After the dining set drama, I thought I'd look for something quite fancy – but that might be dupe-friendly. I found an extremely pretty Porta Marble Coffee Table, which retailed at a whopping £999. Come on Google, sort me out - and of course, it did. 27 This is a gorgeous marble creation but few people have £1,000 to spare on a coffee table Credit: Luxura Home / The Sun 27 The price is very high for most Brits – so I went looking for a cheaper buy Credit: Luxura Homa / The Sun It instantly surfaced an Erie coffee table for £675, but that was still too high. So I scrolled on and found a stellar bargain from Daals. It's the Maru Round Oak Pedestal Coffee Table in Washed White for £189.99. This obviously isn't marble, but it has a lacquer effect that gives it a white shine like the original. 27 This oak coffee table gives off a similar effect to the posh marble one – but at a fraction of the price Credit: Daals / The Sun This is a brilliant example of a lookalike with a massive saving. Importantly, it's unlikely I would've found this – as I wouldn't have searched for oak while looking for an alternative to a marble coffee table. Potential Saving: £809.01 That brings the grand total savings to £5,930.04, courtesy of Google's online brain. WHAT ELSE CAN YOU USE GOOGLE GEMINI FOR? Here's the official tip list from Google... Go Live with Gemini to brainstorm ideas, simplify complex topics, and rehearse for important moments. Connect with your favourite Google apps like Search, Youtube, Google Maps, Gmail, and more Study smarter and explore any topic with interactive visuals and real-world examples Unlock a world of expertise and get tailored information about any topic Plan trips better and faster Create AI-generated images in seconds Get summaries, deep dives, and source links, all in one place Brainstorm new ideas, or improve existing ones Picture Credit: Google / The Sun
Irish Times
9 hours ago
- Irish Times
‘Cautiously optimistic': Trump officials hopeful of US-EU trade deal
Donald Trump will meet the president of the European Commission Ursula von der Leyen as work gets under way on a five-day visit to Scotland. The US president flew into the country on Friday night and was then s een playing golf at his Trump Turnberry resort the following day. However, on Sunday, he will meet von der Leyen for talks on the trading relationship between Europe and the US. The talks come ahead of discussions with prime minister Keir Starmer on Monday, which are also expected to focus on trade issues. The UK and the US struck a trade deal recently, with discussions between the two men expected to focus on this, with reports suggesting Starmer will be looking for the US to cut the tariffs for British steel. The start of discussions show the US president getting down to business on what is a private, five-day visit to Scotland. On Saturday, he was spotted playing a round at the Turnberry course, which he purchased in 2014. A massive security operation was in place as he drove his own buggy. Even before he took to the course, police officers and military personnel could be seen searching the area around the resort, which has had a metal fence erected around it as part of heightened security measures. Police snipers are positioned on the roof of the Trump Turnberry hotel during US president Donald Trump's visit in Turnberry, Scotland. Photograph: Getty Images No protesters were seen while he was playing on Saturday, but hundreds of people gathered in both Edinburgh and Aberdeen for demonstrations against his visit, organised by the Stop Trump Coalition. Police Scotland said that no arrests were made but a 50-year-old woman was given a recorded police warning in Edinburgh. Trump has said there was a 50-50 chance that the US and the 27-member European Union could reach a framework trade pact, adding that Brussels wanted to 'make a deal very badly.' The EU faces US tariffs on more than 70 per cent of its exports, with 50 per cent on steel and aluminium, 25 per cent on cars and car parts and a 10 per cent levy on most other EU goods. Trump has said he would hike the rate to 30 per cent on August 1st, a level EU officials said would wipe out whole chunks of transatlantic commerce. Further tariffs on copper and pharmaceuticals are looming. A 15 per cent tariff on most EU goods would be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal on all industrial goods. But it would be better than 30 per cent and it would remove uncertainty about business conditions that has already hit profits of European companies. For Trump a deal with the EU would be the biggest trade agreement, surpassing the $550 billion accord reached with Japan earlier this week. Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, has so far reeled in agreements with Britain, Japan, Indonesia and Vietnam, although his administration has failed to deliver on a promise of '90 deals in 90 days.' The EU deal would be a huge prize, given that the US and EU are each other's largest trading partners by far and account for a third of global trade. While close, a deal still requires some final negotiations. US trade representative Jamieson Greer and commerce secretary Howard Lutnick departed Washington for Scotland on Saturday for talks with EU trade commissioner Maros Sefcovic, who is also travelling to Scotland, before the Trump-von der Leyen meeting. 'We're cautiously optimistic that there will be a deal reached,' said a Trump administration official, who spoke on the condition of anonymity. 'But it's not over till it's over.' In case there is no deal and the US imposes 30 per cent tariffs from August 1st, the EU prepared countertariffs on 93 billion euros ($109 billion) of US goods. EU diplomats have said a possible deal would likely include a broad 15 per cent tariff on EU goods imported into the US, mirroring the US-Japan deal, along with a 50 per cent tariff on European steel and aluminium. Trump told reporters there was 'not a lot' of wiggle room on the 50 per cent tariffs that the US has on steel and aluminium imports, adding, 'because if I do it for one, I have to do it for all.' It remains unclear if Washington would exempt EU imports from other sectoral tariffs on automobiles, pharmaceuticals and other goods that have already been announced or are pending although EU officials are hopeful the 15 per cent baseline tariff would apply also to cars and pharmaceuticals. After spending some time at his South Ayrshire resort, Trump will head to Aberdeenshire, where he is expected to open a second course at his Trump International golf resort in Balmedie. During his time in the north east, Trump is also due to meet Scottish first minister John Swinney. Speaking ahead of the talks, Swinney said it was his responsibility to 'raise global and humanitarian issues of significant importance, including the unimaginable suffering we are witnessing in Gaza' with the president. Saying he wanted to 'ensure Scotland's voice is heard at the highest levels of government across the world' Swinney added: 'That is exactly what I will do when I meet with president Trump during his time in Scotland.' Mr Swinney announced that he met Ms von der Leyen on Saturday evening in Glasgow and discussed the wars in Ukraine and Gaza. Mr Swinney said: 'I was pleased to welcome the president of the European Commission, Ursula von der Leyen, to Scotland. 'During our meeting, I outlined Scotland's continued support for the European Union's leadership in demanding free and safe humanitarian aid in Gaza, alongside efforts to bring an end to the unbearable suffering unfolding. 'I also took the opportunity to reiterate Scotland's steadfast commitment to Ukraine and the country's commitment to work with European partners on key issues, including energy.' - Reuters and PA
Irish Times
9 hours ago
- Irish Times
Will I pay tax in Ireland if a US relative leaves me something in their will?
I am a naturalised US citizen, born and raised in Ireland, and living in the USA. I will be bequeathing 50 per cent of my estate to my sister (with the goal of her passing it on to her children). If she predeceases me, it will go directly to her children per stirpes. My estate would be probated in the USA (Texas specifically). What are the tax implications for my sister inheriting funds from a relative in the US? Would it be better to divide the bequest between her and her two children (1/3 each) to reduce the tax liability? Or would it be best to bequeath it directly to them in first place? I had neglected to even consider tax consequences until reading your column recently. READ MORE Mr DM The position on inheritance and taxation is very different in the US and in Ireland. While most states in the US, including Texas, have no inheritance tax , Ireland does. It apples if the person either giving the inheritance or receiving it is tax resident or ordinarily resident for tax here. Not that it matters here, but it also applies if the property subject to the inheritance that is situated in Ireland – even if neither the dead person or the beneficiary is resident here. In general with cross-border inheritances, there are taxation agreements between Ireland and those other countries that ensure you do not pay tax twice on the same inheritance. If the inheritance tax levied in another country is lower than the liability here, an Irish beneficiary would pay only the difference between that and the Irish liability where these double taxation agreements apply. Where the inheritance tax bill abroad is higher than it would be here, no tax is levied here but neither do you get any refund for the amount paid in the other country that is higher than your bill would have been in Ireland. With Texas, this is moot as you have no inheritance tax there. Apparently only five US states do have inheritance tax levied on beneficiaries. The US does also have a separate estate tax which is levied on estates of dead people which exceed a financial threshold. Again, Texas does not have an estate tax. There is a US federal estate tax which, if you were to die this year, would kick in if the estate you leave behind is worth more than $13.99 million (€11.9 million). That is adjusted every year: the 2025 figure is roughly $400,000 up on 2024. So that's the very cursory general picture on cross-border inheritance. What about the position of your sister and her children if and when they inherit from you. In Ireland, the amount you can inherit depends on your relationship with the dead person. The highest threshold – €400,000, or around $470,000 – is reserved almost solely for children inheriting from their parents. The thresholds fall sharply from there. Category B, which covers inheritances received from siblings, grandparents and aunts and uncles by blood – the relevant threshold for your sister and her children – is just €40,000. That figure is halved again for more remote relatives, in-laws and friends. And those thresholds are 'lifelong' – or at least they date back to any inheritance received from people in each category since December 5th, 1991. Gifts in excess of €3,000 are covered by the same regime and thresholds. So, assuming your sister and her children have never received a large gift or an inheritance from a sibling, a grandparent or some other aunt or uncle, they can take €40,000 tax free from you if you die this year. On anything over that amount, they will pay tax at 33 per cent. I say this year because, as with US federal estate tax, the threshold can rise and fall in Ireland from year-to-year although it is no longer linked to inflation or any other measure. Would it make more sense to give it all to your sister with the intention that it be evenly distributed to her children on her own death or allocate it directly to your sister and her children individually? Helpfully, that depends. Upfront, it is fairly straightforward. I've no idea of how much money is involved here nor how many children your sister has. Let's assume she has three children and the amount involved translates as €600,000. If that is left entirely to your sister, she will take €40,000 tax free assuming she has not taken an inheritance or large gift from anyone in Category B, as mentioned above. That would leave €560,000 subject to tax at 33 per cent – a tax bill of €184,800. After tax, she would have a net inheritance of €415,200 (560,000 – 184,800 + 40,000). If the money was instead split evenly and given directly in equal parts to your sister and her children, they would each get €150,000. On the same presumption as above, they take €40,000 tax free and pay €36,300 in tax on the balance of €110,000. After tax, each would have €113,700. Between the four of them, that comes to €454,800 – or close to €40,000 more than if the money was all given initially to your sister. Much depends on the amounts we are talking about here. If this portion of your estate comes to less than €40,000 per person, it would certainly make more sense to give it directly to your sister's children as it would not exceed each person's tax free threshold. If, using our example the €160,000 went instead initially to your sister, she would pay tax on three-quarters of it before anything can eventually be passed on to her children. And of course, if it did all go to your sister, several new factors come into play. While it is your goal that the money goes ultimately to your sister's children, if you leave it to her it will be entirely at her discretion whether that happens and, if it does, whether it is divided equally or whether every child is included in any division. Also, depending on what else she is leaving to her children, that money may be taxed again if it brings each niece or nephew's inheritance from their mother above the €400,000 – or whatever the threshold in place will be at that time. Assuming the plan is for the children to benefit ultimately, one way to avoid or reduce any future tax bill would be her to avail of the small gift exemption which would allow her to pass on €3,000 each year to each child from your inheritance that she is managing on their behalf. That would clearly reduce any amount that might be subject to tax later on. That is also an option for your right now if the amount you intend to leave amounts to more than €40,000 per person. The small gift exemption applies to the beneficiary not the donor so there is nothing to stop you gifting the equivalent €3,000 each year to each of your sister's children from the US, reducing any eventual tax bill on a future inheritance. You'll need to manage exchange rates if you do that as anything above €3,000 in any year comes off their inheritance tax free threshold. As a general rule, the best way to reduce tax on inheritance in Ireland is to spread it widely. The more recipients, the lower any ultimate tax bill. But of course, in this case, that is limited by the size of the family whom you wish to benefit. Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to , with a contact phone number. This column is a reader service and is not intended to replace professional advice
