Shares of tech giants surged following stronger-than-expected earnings reports from Google and Microsoft, both of which reported double-digit profit increases. These positive results further solidified the case for the heavy investment in artificial intelligence (AI) by these companies.
Google’s parent company, Alphabet, reported a profit of $23.7 billion in the first quarter of the year, marking a 57 percent increase. The company also announced its first-ever dividend of $0.20 per share. Google’s success was attributed in part to its AI text-to-image model, Gemini, according to CEO Sundar Pichai.
Similarly, Microsoft saw a 20 percent increase in quarterly profit, reaching $21.93 billion. This strong performance contrasted with rival Meta, which experienced a significant drop in market value after announcing higher expenses related to AI investments.
The positive earnings announcements from Google and Microsoft come amidst increased regulatory scrutiny of major AI players in the US and Europe. In January, the US Federal Trade Commission initiated an inquiry into potential anticompetitive practices involving partnerships between tech giants and AI startups. In March, the European Commission launched a probe into the management of AI risks by companies, including concerns around computer-generated deepfakes.