Photo Credit: Photo Mix from Pixabay
 Alphabet aka Google (Nasdaq: GOOG) recently reported stronger than expected results for its third quarter driven by the strong momentum in its cloud business.
 Alphabet’s FinancialsAlphabet’s third quarter revenue grew 15% to $88.3 billion, beating analyst estimates of $86.3 billion. Net income grew 34% to $26.3 billion or $2.12 per share, beating analyst estimates of $1.85 per share. By segment, revenues from Google Services that includes Search, Advertising, Android, Chrome, Hardware, Google Maps, Google Play, and YouTube ads grew 13% to $76.5 billion. Advertising revenue grew 10.4% to $65.85 billion, driven by strength across Google Search, Google subscriptions, platforms, and devices, and YouTube ads. Google Cloud revenues grew 35% to $11.4 billion ahead of analyst estimates of $10.88 billion. Revenues from Other Bets grew 31% to $388 million. 
 Google’s AI StrategyDuring the recent earnings call, CEO Sundar Pichai talked about its differentiated full stack approach to AI innovation  – a robust AI infrastructure including data centers, chips and a global fiber network; world-class research teams working on Gemini model capabilities, including long context understanding, multimodality and agentive capabilities;  and a broad global reach through products and platforms that touch billions of people and customers around the world.Enterprise adoption of Google’s AI infrastructure, including Vertex and BigQuery, has increased, with customers like Hiscox and Snap benefiting from Gemini’s performance. Cybersecurity solutions powered by Google Threat Intelligence and Mandiant have also seen adoption growth. New tools in customer engagement have enhanced experiences for companies like Volkswagen, and employee agents in Workspace have improved work quality, as reported by 75% of daily users.Internally, AI has boosted coding efficiency, with AI generating over a quarter of new code. The company has recently launched AI-driven search innovations, such as AI Overviews, Circle to Search, and Lens. AI Overview, now available in 100+ countries, drives deeper search engagement, and Lens facilitates 20 billion visual searches monthly.
 Google’s Character.ai DealEarlier in the quarter, Google reportedly signed a deal with chatbot startup Character.ai for an estimated $2.7 billion. Menlo Park-based Character.ai was set up in 2022 by former Google engineers and AI experts Noam Shazeer and Daniel De Freitas. As part of the deal, Naom and 20% of its staff will work for DeepMind, Google’s AI arm. Character.ai will move away from building out the language model and will now pivot exclusively to post-training by using open-source models developed by others such as Meta’s Llama. Character.ai will also provide Google with a non-exclusive license for its current LLM technology.Character.ai is a full-stack AI company that lets users personalize their AI experience by interacting with AI “Characters” that are chatbots mimicking famous personalities from history, fiction, and popular culture. It already has 18 million chatbots available that are accessed by over 20 million registered users. Character.ai expects to generate $16.7 million in revenues this year. It had raised $193 million in total funding. It raised $150 million in 2023 at a valuation of $1 billion.Its stock is trading at $176.14 with a market capitalization of $2.16 trillion. It hit a 52-week high of $193.31 in July this year and a 52-week low of $124.92 in December last year.More By This Author:Cloud Stocks: ServiceNow Expands AI Use Cases
Cloud Stocks: IBM’s Smaller Granite AI Models Eye Vertical AI
AI Unicorns: SambaNova’s Chip Competes With Nvidia