Investors are particularly interested in how companies will generate revenue from generative AI (GAI) products and services. For Google, estimates for 2024 include chips at $12.5 billion, networking at $1.8 billion, other server costs at $5.1 billion, and buildings and equipment at $10.6 billion. However, companies like Alphabet, Microsoft, and others do not neatly break out AI-driven sales as AI is interwoven throughout their businesses. This is expected to change, with Google's cloud computing division reporting a profit for the first time last year due to more business from AI startups.
Key takeaways:
- Analysts are pushing to give investors more information on the amount tech companies deeply intrenched in AI spend, and how much each company individually earns.
- Google's parent company Alphabet, Amazon, Apple, Meta Platforms, and Microsoft are scheduled to report fourth-quarter earnings this week.
- Estimates for Google in 2024 include chips at $12.5 billion, networking at $1.8 billion, other server costs at $5.1 billion and buildings and equipment at $10.6 billion.
- Investors and marketers want platforms to show them the money, with a lot of pressure for Microsoft and Alphabet to show tangible evidence that their AI bets are paying off.