As fears of a bursting AI bubble reach new heights, Google has emerged as arguably one of the best yard sticks available to measure investor sentiment around AI.
Google’s parent company, Alphabet, released its quarterly earnings report on Wednesday. On the surface, there were plenty of reasons to pop the champagne: as the New York Times reported, the company’s profits rose to a staggering $112 billion, four times higher than the nearly $25 billion in profit over the same period last year.
Yet underlying that banner profit is a familiar beast: the same circular financial motions that gave rise to the AI bubble narrative in the first place.
As the NYT observes, the vast majority of Google’s windfall — $99 billion, to be exact — wasn’t due to actual revenue from AI or any other services the company offers; instead, it was due to Alphabet’s mammoth investments in other tech companies. In particular, Alphabet attributed the massive profits to investments in corporations also chasing the AI payday, like Elon Musk’s SpaceX, as well as Anthropic, the company behind the popular chatbot Claude.
