Alphabet posted $74.6 billion in quarterly sales, up seven percent from the same time last year. Profits jumped 15 percent, to $18.4bn.
While advertising sales carried the bulk of the company's growth, its cloud division also reported a 28 percent increase in sales to $8bn. Google Cloud also reported its second ever profit, making $395m.
The company continued to spend heavily, reporting $6.89 billion in capital expenditure. "The largest component was for servers, which included a meaningful increase in our investments in AI compute," CFO Ruth Porat said in an earnings call.
But the capex spend was actually lower than initially expected (with analysts predicting around $7.9bn), due to a slowdown in office build-out and "delays in certain data center construction projects." DCD has contacted the company for specifics on which projects are behind schedule.
Porat, who is set to become the company's president and chief investment officer, expects "levels of investment in our technical infrastructure [to] increase through the back half of 2023 and continuing to grow in 2024," both to catch up with the slower start and to "support the opportunities we see in AI across Alphabet, including investments in GPUs and proprietary TPUs as well as data center capacity."
CEO Sundar Pichai added: "Our AI-optimized infrastructure is a leading platform for training and serving generative AI models. More than 70 percent of generative AI unicorns are Google Cloud customers, including Cohere, Jasper, Typeface, and many more. We provide the widest choice of AI supercomputer options with Google TPUs and advanced Nvidia GPUs, and recently launched new A3 AI supercomputers powered by Nvidia's H100."
Pichai also pointed to the company's custom networking gear, which we profiled in detail earlier this year, as proof that the company had long invested in building AI-ready data centers.
The exec's comments come as analysts predict a record year for data centers on the back of an AI boom.