This significant upswing demonstrates a marked shift in attitudes toward Alphabet after the 2022 introduction of ChatGPT led certain investors to worry the firm had lost its AI advantage, despite having invented much of the foundational technology for generative AI. Alphabet recovered its momentum this year by making its cloud division a key contributor to growth, which attracted an investment from Warren Buffett's Berkshire Hathaway, and its new Gemini 3 model is garnering excellent initial reviews.

The milestone, however, could intensify anxieties among some executives who caution that rising valuations have detached market trends from business reality, prompting concerns over an economic bubble reminiscent of the 1990s dot-com era. These bubble fears are also amplified by circular transactions involving OpenAI and Nvidia, two prominent firms in the AI sector. Analysts, nevertheless, maintain that Google is strongly positioned in the AI competition because of its ample cash reserves, its own in-house chip production offering an alternative to Nvidia's expensive processors, and its massive internet search operation, which is already experiencing benefits from AI incorporation.

In October, the moment of truth arrived for the AI tech titans as investors worldwide held their breath after Wall Street's close when Microsoft, Alphabet (Google), and Meta (Facebook) – collectively worth nearly 10 trillion dollars – began releasing their quarterly earnings reports in another attempt to beat forecasts.

Google (through its parent company Alphabet) beat forecasts by 26% ($2.87 per share compared to the $2.27 expected) with revenues of 100 billion dollars. Microsoft also beat forecasts by 14% ($3.72 per share compared to the $3.6 expected). Meta on the other hand had to pay 15 billions in a one-time payment, which resulted in a miss of 84% in the earnings.

Alphabet reported more than $100 Billion of revenue in a quarter for the first time ever. Google parent company Alphabet also reported strong third-quarter results, with revenue climbing 16% year-over-year. Google Search & Other grew 15%, while YouTube Ads increased 15% during the period. Google Cloud posted the strongest growth at 34%, though Google Network saw a 3% decline. The company's EBIT rose 9.5% with a margin of 31%, and earnings per share jumped 35%.

The head of Google's parent firm Alphabet, Sundar Pichai, has recently cautioned the BBC that every company would be impacted if the AI bubble were to burst. Speaking exclusively to BBC News, Pichai acknowledged that while AI investment growth is an "extraordinary moment," there is some "irrationality" in the current boom. Amid fears in Silicon Valley of soaring valuations, Pichai warned, "I think no company is going to be immune, including us."

His wide-ranging interview at Google's California headquarters, reported by the BBC, touched on energy needs, climate targets, UK investment, and AI's effect on jobs, coming as market scrutiny intensifies. Alphabet's shares have doubled in seven months to $3.5 trillion as market confidence in its ability to counter OpenAI grows. A specific focus remains on Alphabet's competition with Nvidia, run by Jensen Huang, which recently hit a $5 trillion valuation, even as analysts question the $1.4 trillion in deals surrounding OpenAI.

Pichai's remarks about "irrationality" echoed Alan Greenspan's 1996 "irrational exuberance" warning during the dotcom boom. Pichai told the BBC the industry can "overshoot" in such cycles. "We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound," he said. "I expect AI to be the same. So I think it's both rational and there are elements of irrationality through a moment like this." His comments follow a similar warning from JP Morgan's Jamie Dimon, who told the BBC some AI investments would "probably be lost." Pichai argued Google's "full stack" model provides a better position to handle turbulence.

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His wide-ranging interview at Google's California headquarters, reported by the BBC, touched on energy needs, climate targets, UK investment, and AI's effect on jobs, coming as market scrutiny intensifies. Alphabet's shares have doubled in seven months to $3.5 trillion as market confidence in its ability to counter OpenAI grows. A specific focus remains on Alphabet's competition with Nvidia, run by Jensen Huang, which recently hit a $5 trillion valuation, even as analysts question the $1.4 trillion in deals surrounding OpenAI.

Pichai's remarks about "irrationality" echoed Alan Greenspan's 1996 "irrational exuberance" warning during the dotcom boom. Pichai told the BBC the industry can "overshoot" in such cycles. "We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound," he said. "I expect AI to be the same. So I think it's both rational and there are elements of irrationality through a moment like this." His comments follow a similar warning from JP Morgan's Jamie Dimon, who told the BBC some AI investments would "probably be lost." Pichai argued Google's "full stack" model provides a better position to handle turbulence.

The BBC noted the tech giant is also expanding its UK footprint, having announced a £5 billion investment in UK AI infrastructure and research in September. Pichai confirmed Alphabet will develop "state-of-the-art" research via its London-based DeepMind unit. He stated for the first time that Google would "over time" "train our models" in the UK, a move ministers believe will secure the UK as an AI "superpower" after the US and China. "We are committed to investing in the UK in a pretty significant way," Pichai said.

However, the Alphabet chief also highlighted the "immense" energy requirements of AI, which the International Energy Agency stated consumed 1.5% of global electricity last year. Pichai, according to the BBC, said action is needed, including in the UK, to scale up energy infrastructure. "You don't want to constrain an economy based on energy, and I think that will have consequences," he warned. He conceded these intensive energy needs mean slippage on the company's 2030 net-zero climate target, stating, "The rate at which we were hoping to make progress will be impacted."

AI's impact on employment will be significant, Pichai told the BBC, labeling it "the most profound technology" humanity has ever addressed. "We will have to work through societal disruptions," he stated, noting it will simultaneously "create new opportunities." He explained, "It will evolve and transition certain jobs, and people will need to adapt," emphasizing that those who adjust to AI "will do better," adding, "It doesn't matter whether you want to be a teacher [or] a doctor. All those professions will be around, but the people who will do well in each of those professions are people who learn how to use these tools."

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The new browser will debut in the next few weeks, as confirmed by three individuals familiar with the project, and seeks to employ artificial intelligence to revolutionize consumer web browsing experiences, Reuters reported. This development would provide OpenAI with more immediate access to a fundamental element of Google's success – user data collection.

Should OpenAI's 400 million weekly active ChatGPT users embrace this browser, it could significantly impact a crucial element of Google's advertising revenue stream, sources told Reuters. Chrome serves as a vital foundation for Alphabet's advertising operations, which generate nearly three-quarters of the company's total revenue, by supplying user information that enables Alphabet to target advertisements more effectively and profitably while directing search traffic to Google's own search engine as the default option.

The OpenAI browser will be engineered to maintain certain user interactions within a ChatGPT-style native chat interface rather than requiring users to navigate through traditional websites, two sources revealed.

This browser development forms part of OpenAI's comprehensive strategy to integrate its services throughout consumers' personal and professional digital experiences, one source explained.

OpenAI chose not to provide commentary on the matter.

The sources requested anonymity because they lack authorization to discuss the matter publicly.

Under entrepreneur Sam Altman's leadership, OpenAI transformed the technology industry with its AI chatbot ChatGPT's debut in late 2022. Following its initial triumph, OpenAI has encountered intense competition from competitors including Google and startup Anthropic, prompting the company to explore new growth opportunities.

OpenAI announced its entry into the hardware sector in May, investing $6.5 billion to acquire io, an AI devices startup founded by Apple's former design chief, Jony Ive.

A web browser would enable OpenAI to seamlessly incorporate its AI agent products, such as Operator, into the browsing experience, allowing the browser to execute tasks on users' behalf, sources indicated.

The browser's ability to access user web activity would establish it as the optimal platform for AI "agents" capable of performing actions on users' behalf, such as making reservations or completing forms, directly within the websites they frequent.

Tough competition

OpenAI faces significant challenges ahead – Google Chrome, utilized by more than 3 billion individuals, currently commands over two-thirds of the global browser market, according to web analytics company StatCounter. Apple's second-ranked Safari trails considerably with a 16% market share. OpenAI reported 3 million paying business users for ChatGPT last month.

Additional AI startups including The Browser Company and Brave have introduced AI-powered browsers capable of executing actions on users' behalf this year. Perplexity, a well-funded startup recognized for its search engine, also launched its AI browser, Comet, on Wednesday.

Chrome's function in supplying user information to help Alphabet target advertisements more effectively and profitably has proven so successful that the Department of Justice has demanded its divestiture after a US judge ruled last year that the Google parent maintains an unlawful monopoly in online search.

OpenAI's browser operates on Chromium, Google's open-source browser code, two sources confirmed. Chromium serves as the source code for Google Chrome and numerous competing browsers including Microsoft's Edge and Opera.

OpenAI recruited two veteran Google vice presidents last year who were members of the original team that created Google Chrome. The Information first reported their hiring and that OpenAI previously contemplated building a browser.

An OpenAI executive testified in April that the company would consider purchasing Chrome if antitrust enforcers succeeded in forcing the sale.

Google has not made Chrome available for sale. The company has stated it plans to appeal the ruling that it maintains a monopoly.

OpenAI chose to develop its own browser rather than simply creating a "plug-in" for another company's browser to maintain greater control over the data it can collect, one source stated.

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In her inaugural earnings call as Alphabet's chief financial officer, Israeli-American Anat Ashkenazi reported robust third-quarter results while outlining a strategic vision balancing AI investments with fiscal discipline. The tech giant posted a 15% year-over-year revenue increase to $76.5 billion under her first quarterly review.

Ashkenazi's journey to leading finance at one of the world's largest tech companies reflects a notable trajectory through Israel's academic and banking sectors. After earning her bachelor's degree in accounting and economics from the Hebrew University of Jerusalem and an MBA from Tel Aviv University, she began her career at Bank Hapoalim, one of Israel's largest financial institutions, before joining Eli Lilly in 2001.

"As I look at the business, I see opportunities for further growth propelled by AI and the underlying momentum across the business," Ashkenazi told investors during Thursday's earnings call for Alphabet, the parent company of Google. "While we have a strong balance sheet to support these investments, we will be looking for efficiencies so that we can fund innovation in priority areas." Her debut quarter demonstrated impressive performance across key metrics, with operating income jumping 34% to $28.5 billion and earnings per share increasing 37% to $2.12. The transition from her predecessor Ruth Porat appears seamless, with Ashkenazi already implementing her vision for the company's financial future.

Drawing on financial expertise developed across multiple continents, Ashkenazi detailed significant infrastructure investments, with capital expenditure reaching $13 billion during the quarter. The company announced over $7 billion in planned data center investments, with nearly $6 billion allocated to US facilities. The cloud division showed particularly strong results under her first quarter, with revenue surging 35% to $11.4 billion and operating margins reaching 17%. YouTube achieved a milestone during her initial quarter, with combined advertising and subscription revenue surpassing $50 billion over the past four quarters.

Google's new CFO, Anat Ashkenazi, is cutting costs & boosting AI spending . She's looking to squeeze more savings out of the company while investing in AI innovation. What's next for Google's AI plans? #AI #Googlehttps://t.co/seWvxscNVq

— AI News Bulletin (@ai_bulletin_top) October 29, 2024

Alphabet CEO Sundar Pichai highlighted the other aspects of the report while providing a more refined outlook. "Q3 was another great quarter. The momentum across the company is extraordinary," said Pichai. "Our commitment to innovation as well as a long-term focus and investment in AI are paying off."

Looking ahead, Ashkenazi indicated that advertising revenue growth in Q4 will face tough comparisons due to strong performance in the second half of 2023, summing up the overall gains made in the reporting period. "In Q3, we also returned value to shareholders in the form of $15.3 billion in share repurchases and $2.5 billion in dividend payments. Overall, we returned a total of nearly $70 billion over the trailing 12 months to shareholders. As we look forward, we're working to balance our investments in AI and other growth areas with the cost discipline needed to fund those activities," Ashkenazi noted.

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A discovery from the Tel Lachish excavation in Israel could be the earliest known example of alphabetic writing in Israel and casts doubt on existing hypotheses about the spread of the alphabet, archaeologists believe.

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According to an article published last week in the Cambridge University journal Antiquity, a team of researchers that included Dr. Haggai Misgav of the Hebrew University of Jerusalem discovered a pottery fragment at Tel Lachish that dates from 1,450 BCE that could be the "missing link" in the development of alphabetic writing.

"This shard is one of the earliest examples of early alphabetic writing discovered in Israel," said co-author Dr. Felix Hoflmayer, who noted that the very existence of the inscription prompted them to "re-think" the appearance and spread of alphabetic writing in the Near East.

The fragment was discovered in 2018, but it was only now reported for the first time. The piece is only some 4 cm. (1.5 inches) long, and appears to have been part of the rim of a bowl imported from Cyprus. The inner part of the fragment is inscribed with a group of diagonal letters in a dark ink. Two lines of three letters each have been discerned, the team wrote.

The writing has been identified as proto-Canaanite, whose letters are based on Egyptian hieroglyphs. Although the partial nature of the fragment has presented difficulty in deciphering the writing, the researchers believe that they have identified the words "slave" or possibly a person's name containing the same letters, and the early Hebrew word "nefet" (honey). However, the experts noted that the meaning of the words could change depending on whether they were read from right to left or left to right.

So why does this small bit of Cypriot pottery play such a huge part in our understanding of the development of the alphabet? The new find casts doubt on previous hypotheses that the alphabet was spread throughout the region by the dominant Egyptian culture.

Archaeologists working in Sinai in 1905 discovered a written inscription that they dated to 1,800 BCE, and additional inscriptions dating to 1,300 have been discovered in the Levant. But until the shard from Tel Lachish, there was a gap of several hundred years between the inscription from Sinai and others in the Levant region, from where the alphabet is believed to have spread throughout what we now know as the Middle East and developed into systems of writing that included early Hebrew script.

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