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AI Overviews Top 2 Billion Users and Boost Search by 10%

By Advanced AI EditorJuly 24, 2025No Comments4 Mins Read
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Google’s parent Alphabet on Wednesday (July 23) raised the amount it expects to spend on capital projects for this year and forecasted even higher spending in 2026.

Alphabet raised its projected capital expenditures to $85 billion in 2025. That’s 62% more than 2024, when it spent $52.5 billion. Earlier this year, Alphabet forecasted that it would spend $75 billion in capex for 2025.

“Our AI [artificial intelligence] infrastructure investments are crucial to meeting the growth and demand from cloud customers,” said Alphabet and Google CEO Sundar Pichai during a call with analysts to discuss second quarter earnings for the period ending June 30.

Alphabet did not give a figure for capex for 2026. In the second quarter, two-thirds of capex went to servers and the rest to data centers and networking equipment.

Shares of Alphabet fell 1.3% to $189.05 in after-hours trading.

Alphabet’s decision to step up building of AI infrastructure aims to bring on more capacity to process AI workloads. That’s due to higher demand for AI services at Google Cloud, according to the company.

In the second quarter, Google Cloud revenues increased 32% to $13.6 billion and now has an annual run rate of more than $50 billion. Cloud also has a backlog of customer orders, the company said.

Asked whether all this investment would result in a robust ROI, Pichai said the company is building “an installed base” and efficiently making investments to grow the cloud business.

“We’ll be able to have a healthy ROI on our investments, particularly in this AI moment,” Pichai said during an earnings call with analysts.

Pichai also noted that Google Cloud’s churn rates are “very low” and its customer satisfaction is “very high.”

In the quarter, Google Services revenue — which includes search, subscriptions, platforms, devices and YouTube ads — rose by 12% to $82.5 billion from the prior year.

Pichai said AI Overviews now has more than 2 billion monthly users across 200 countries and territories. It also drives 10% more search queries globally. For YouTube, short videos are now earning as much revenue per watch as traditional videos.

Read more: Google, Meta and Others Pledge Billions of Dollars to Build AI Data Centers

Talent Poaching

One analyst asked for Pichai’s thoughts on the talent poaching going on in the AI community. Microsoft reportedly hired two dozen Google DeepMind employees in recent months, according to CNBC. One, Mustafa Suleyman, Microsoft’s AI chief, was a co-founder of DeepMind.

Meta also reportedly hired three Google AI researchers who worked on a previous version of Google’s Gemini model — with Deep Think — that just won a gold medal at the prestigious International Mathematical Olympiad.

Pichai said that while individual hires tend to get headlines, the reality is that Google hires a number of skilled workers. He also said that top researchers join companies based on a host of reasons, not just compensation. These reasons would include access to computing power and the quality of peers they would meet at work.

“We’re pretty competitive on all those fronts,” Pichai said.

Google itself reportedly poached several top AI researchers. The company signed a $2.4 billion licensing deal with AI coding startup Windsurf and recruited its CEO, Varun Mohan, co-founder Douglas Chen, and several researchers.  

Windsurf’s acquisition by OpenAI fell through and the startup would now be acquired by Cognition, whose AI engineer “Devin” became a viral sensation when it first came out.

In the second quarter, Alphabet reported a 19% increase in net income to $28.2 billion, or $2.31 per share, beating the consensus forecast of $2.20 per share. In the same quarter a year ago, Alphabet earned $23.6 billion, or $1.89 per share.

Revenue rose by 14% to $96.4 billion. Wall Street analysts’ consensus estimate was $93.98 billion, according to S&P Global Market Intelligence.

Free cash flow in the quarter fell 61% year over year to $5.3 billion. The company said it issued fixed-rate senior unsecured notes to raise $12.5 billion to be spent on general corporate purposes.

Read more:

Google Adds AI-Powered Local Business Calling to Search

Apple and Google Declared Mobile Duopoly by UK Regulator

Google Reportedly Melding Chrome OS and Android Into One Platform



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