Google Earnings Report Shows Resilience Against ChatGPT

Google delivered stronger than expected quarterly earnings yesterday, upending the narrative that AI rivals were impacting Search.

As it turns out, Search-based advertising revenues were up almost 12 percent year-over-year (YOY) to $54.2 billion in the quarter. And Google provided more information about the performance of Search and its other products in a post-earnings conference call with analysts. And the key takeaway is that OpenAI ChatGPT and other AI chatbots have done nothing to slow Google’s growth, at least so far.

Alphabet and Google CEO Sundar Pichai said that “Q2 was a standout quarter with robust growth across the company,” which is precisely what I saw late yesterday when I looked at the numbers. But Search was perhaps key among those numbers, with double-digit revenue growth. And in the conference call, Pichai pointed out that Google’s addition of AI results to Search has had the desired effect.

“Our new Search features continue to perform well, he said. “AI Mode has launched in the U.S. and India and is going well, while AI Overviews now has over 2 billion monthly users across more than 200 countries and territories and 40 languages.”

It’s not just revenues: Google Search experienced growth in overall queries and in commercial queries during the quarter, and the new AI features “cause users to search more as they learn that it can meet more of their needs.” AI Overviews are now driving 10 percent more search queries globally, and that growth is increasing over time. Google also saw “strong growth” in multi-modal searches, “particularly the combination of Google Lens and Circle to Search” together with AI Overviews.

The news for AI Search is a bit fuzzier. There, Pinchai said that AI Mode “continues to receive very positive feedback, particularly for longer and more complex questions.” This feature is just starting to roll out–it’s available in the U.S. and India only and is still an experimental feature–but it already has over 100 million monthly active users [MAUs]. Pincha said Google would continue to enhance AI Mode with the “advanced research tool Deep Search and more personalized responses.”

Google provided some other hard numbers tied to AI.

• The Gemini mobile app now has over 450 million monthly active users across Android and iPhone, Google reported, and daily requests were up over 50 percent quarter-over-quarter (QOQ).
• Over 9 million developers are using Gemini in their apps and other projects.

• Over 50 million people used the AI-powered meeting notes feature in Google Meet in June alone.

• The new Veo 3 image-to-video tool has almost one million MAUs. And since May, over 70 million videos have been generated using Veo 3.

And there were of course some vaguer claims. For example, Google’s Subscriptions business, which is part of a business that saw revenues of $11.2 billion and 11.7 percent growth, “got a boost” from the recently reworked Google AI Pro and Google AI Ultra plans.

But whatever. Despite worries that AI, and ChatGPT in particular, would slow growth in Google’s key revenue generators, there’s no evidence of that at all. Instead, Google is bigger and more powerful than ever.