(Reuters) – Alphabet on Tuesday reported advertising sales for the October-December period that fell short of Wall Street expectations, putting the tech giant’s efforts in artificial intelligence (AI) and computing on the back burner. dematerialized (“cloud”).
Alphabet’s stock lost more than 4% in after-hours trading.
If Google, owned by Alphabet, has developed the basic technology which now benefits the rise of AI, the group faces significant competition from OpenAI, creator of ChatGPT, and Microsoft , financial support for the startup.
He sealed an agreement to invest $2 billion in Anthropic, a startup specializing in AI, with the aim of attracting customers currently using rival “cloud” services offered by Microsoft and Amazon.
The geopolitical context and economic uncertainty, however, cast doubt on advertising revenues linked to AI, while American authorities have begun to look into Alphabet’s investments in the sector.
Alphabet reported $65.5 billion in advertising sales in the fourth quarter, compared to a consensus of $66.1 billion according to LSEG data. It had recorded $59 billion in advertising sales a year earlier.
Fierce competition for online advertising, facing platforms like Facebook, Instagram or TikTok, and the mixed signals sent by the American economy at the end of last year have weighed.
Alphabet recorded overall revenue of $86.3 billion in the October-December period, while analysts on average expected an amount of $85.3 billion according to LSEG data.
The quarterly turnover of its “cloud” division, which investors are particularly watching, stood at $9.2 billion, beating Wall Street expectations of $8.9 billion.
(Reporting by Akash Sriram in Bangalore, Jeffrey Dastin and Peter Henderson in San Francisco; French version Jean Terzian)
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