As with other recent financial quarters, AI has been featured heavily in company filings and in earnings calls with investors.
Big tech giants showed renewed strength last week as companies acknowledged AI as a key growth driver. Google, Meta, Amazon, and Microsoft all mentioned AI (including generative AI) dozens of times while touting their new AI tools and the customers who use them.
“Google Cloud benefits from thousands of product advances,” analysts at William Blair wrote in a research note about Alphabet’s results. “In this space, Google’s products and generative AI capabilities have helped us win and grow relationships with a variety of big brands.”
Some of the major companies that discussed generative AI in their financial filings last week include Qualcomm, Coursera, Appfolio, and MatchGroup. (IBM, which reported strong results last month, recently helped the Recording Academy create a new generative AI tool for the 2024 Grammy Awards.) More tech companies and advertising including Snap, Omnicom, IPG All companies are scheduled to report their quarterly reports this week. They may also talk about their own AI strategies. But for all the promises made to businesses, little was said about AI’s myriad risks.
Meta Catch-22 Moment
Meta’s fourth-quarter conference call with investors brought up AI almost as much as Alphabet. Founder and CEO Mark Zuckerberg is “fully rolling out” the new Meta AI assistant and other AI chat features to U.S. users, adding more than 20 others across Facebook, Instagram, Messenger and WhatsApp. mentioned the initial testing of its generative AI capabilities. He also noted that Meta’s 2024 focus areas include working towards the launch of the Llama 3 model, improving the usability of the Meta AI assistant, and expanding AI Studio, which allows developers to build custom chatbots. said.
In addition to touting hardware such as Ray-Ban Meta smart glasses (including Meta AI) and the Quest 3 headset, Zuckerberg has talked about his commitment to general intelligence research and major investments in additional computing power. also mentioned. Meta executives also noted that advertisers are testing new generative AI tools for audience selection, text variation generation, and image optimization.
“One of the things that has become more clear to me over the last year is that this next generation of services requires building complete general purpose intelligence,” Zuckerberg told investors. “Previously, many of our tools were social, commerce, or maybe media-oriented, so we thought maybe we could deliver these products by solving only a subset of the AI challenges.”
While the rise in teenage users is a sign of the platform’s staying power, growing concerns about the harms of social media could be a double-edged sword. The day before Meta’s earnings were released, Zuckerberg and other tech company CEOs appeared before the Senate Judiciary Committee and faced hours of questioning about the potential harm their companies caused to children. Insider Intelligence analyst Jasmine Enberg said after the hearing that the social platform’s popularity with younger users is “both a weakness and a strength.”
“As AI exacerbates the spread and scale of harmful content on social platforms, rolls back some platform protections, and moves youth user engagement into more private spaces that are difficult to control, “Young people pose one of social media’s biggest challenges,” Enberg wrote. “Several social executives, including TikTok CEO Shou Zi Chew, even argued at the hearing that their core audience is made up of adults.”
The alphabet and the ABCs of AI
In Q4 2023, Google search revenue increased 12.7% to $48 billion, and YouTube ad revenue increased 15%. During Alphabet’s earnings call with investors, AI was mentioned at least 60 times, and related references like “generative” and “Gemini” were mentioned dozens more times.
Executives mentioned how AI is changing search with new features such as Circle To Search, Google Lens Generative Overview, and Generative Search (SGE) experiments. Other features include AI-generated search campaigns, ads in SGE, generated AI features for YouTube creators, and various AI tools for Pixel 8 smartphones. Google executives also mentioned new customers taking advantage of new AI capabilities in Google Cloud and other platforms, including McDonald’s, Motorola, Verizon, Eli Lilly, Novartis, Deutsche Telekom, Uber, Wayfair, GE, and Spotify. did.
Google CEO Sundar Pichai said, “I think AI presents opportunities for us both in terms of substance and monetization. I think we’re still in the early stages of that.” . “I think it’s going to allow us to address information needs even more deeply over the long term. So I’m thinking about it in a long-term context and I’m very excited about what’s going to happen.”
Generative AI that goes beyond advertising
During Microsoft’s Q2 2024 earnings call, the company talked less about advertising and more about how AI will impact other areas. CEO Satya Nadella said AI-generated images and chats both doubled quarter-on-quarter, with both reaching the 5 billion mark in January.
Microsoft reported an 8% increase in search and news ad revenue, which CEO Satya Nadella said was driven by increased search volume, but “negative impact from third-party partnerships.” said that it was offset by Despite a 9% drop in device revenue, Microsoft is committed to making AI a “first-class part of every PC” after a number of AI PCs powered by Windows debuted at CES last month. The aims.
Nadella said a variety of customers deploying Microsoft Copilot include Dentsu, Honda, and Pfizer. Nadella also noted that customers such as Bayer, Air India, and Siemens are building plug-ins that extend the functionality of his Copilot. Microsoft also said that it currently has 53,000 customers using Azure AI, of which one-third are new customers in the past year. Nadella said more than half of the Fortune 500 companies are currently using his Azure OpenAI, including Ally Financial, Walmart, Coca-Cola and Vodafone.
Amazon, another major AI player, said it is building dozens of generative AI apps across the company. Before reporting its quarterly results, it announced a new AI shopping assistant called Rufus that can answer customer questions about products and other topics. Other AI recently announced by Amazon is Q, an AI assistant for enterprise customers. Amazon also mentioned customers using its AI chips, including Anthropic, Qualtrics, and Snap.
“If you look at genAI’s revenue in absolute terms, this is a pretty big number,” Amazon CEO Andy Jassy said on the company’s investor call. “But in the plan for a run-rate business with $100 billion in annual revenue, it’s still relatively small, much smaller than the future business, much smaller than what we actually believe is the future business. years to come. However, the speed of growth is encouraging and our services are resonating with our customers.”
Gartner analyst Mike Froggatt said Amazon remains “relatively quiet” about its advertising business. But he noted that the company is rapidly catching up with Meta and Google in terms of revenue while building an “ecosystem play” in advertising, media and technology.
“They’re not chasing ad spend, they’re chasing deep partnerships with brands across supply, sales, technology services, and advertising and marketing,” Froggatt told Digiday. “That potential pie is much bigger than advertising alone, and when you dig into the overall AI investment, you start to see the bigger picture. We want to build an ecosystem for
Prompts and Products: AI News and Announcements
- A bipartisan group of senators has introduced a new bill that would criminalize non-consensual AI-generated images.
- Advertising holding companies are taking different approaches to deploying generative AI platforms.
- The Browser Company has announced a new ad-free app that provides AI tools for browsing and searching.
- The European Council has approved the text of the AI Act, bringing the EU’s wide-ranging AI legislation closer to completion.
- Italy’s Data Protection Agency said OpenAI’s ChatGPT violates GDPR privacy law. Without giving details, Galante said the investigation had found evidence of “the existence of violations of the provisions contained in the EU’s GDPR.” OpenAI currently has 30 days to respond to authorities.
- AI startup Latimer has launched a new platform aimed at reducing bias in generative AI.
- Google announced new generative AI tools for images and music called ImageFX and MusicFX.
