It's a tale of two AIs for Google. Cloud doubled revenue and tripled profit, probably based off serving models. So good for Cloud.

Search increased revenue and profit which is good. Means that LLMs are not yet stealing revenue. But also bad because the massive spend on infrastructure doesn't look like it's going to come back as increased revenue.

Out of all companies, with their own TPUs and native large scale computing... "habitat" they exist in – they probably know how to spend it well.

People on the internet really overrate google's TPU advantage. OAI and Anthropic and others have been using TPUs as well for a long time now too. And they've also hired lots and lots of talent from the rest of FAANG, hyperscale compute talent and knowledge is also well distributed through all the top AI companies at this point.

They control the supply chain though, so they can't be price-gouged by Nvidia

Pretty sure it's this part:

> generating $127B in cash, and capital spending on property and equipment was $132B, so the business consumed $5B.

well, they don't burn it like anthropic on rent, they spend it on their own TPUs, right?

There's no guarantee it'll generate big enough returns and it's probably at jacked up prices.

not sure why you're getting downvoted, this is pretty much the reason.

They need to do layoffs and it will pop by 20%

First signs that Search revenue might be peaking.

because missed estiamtes https://finance.yahoo.com/technology/article/google-stock-pl...

It's about expectations. They missed expectations on earnings, meaning they're less valuable than people thought.