Wednesday, January 31, 2024

How Much AI Revenue Do Alphabet and Microsoft Already Earn?

Sooner rather than later, financial analysts tasked with quantifying the revenue impact of artificial intelligence were bound to start asking questions about direct revenue lift. That tends to be a bit opaque since new products, with relatively low revenue contributions, tend not be broken out explicitly when financial reporting happens. 


You might recall that it took some time before Amazon and Microsoft would break out cloud computing revenues, for example. That same process now applies to AI revenues. 


Company

AI Revenue Source

Estimated AI Revenue

Impact on Overall Revenue

Google

Google Cloud Platform AI Services (Dialogflow, AI Platform)

$2.5 - $3.0 billion

12 - 15% of GCP revenue, 3 - 4% of total revenue


Advertising and Marketing Tools with AI (Google Ads, Marketing Platform)

$1.0 - $1.5 billion

5 - 8% of advertising revenue, 1 - 2% of total revenue


Search and other Google Apps with AI (Google Assistant, Photos)

Indirect growth contribution

Microsoft

Azure AI Services (Azure AI, Azure Machine Learning)

$5.0 - $6.0 billion

20 - 24% of Azure revenue, 8 - 10% of total revenue


Productivity and Business Applications with AI (Office 365, Dynamics)

Indirect growth contribution 

?


Search and Advertising with AI (Bing, Dynamics 365 Marketing

Indirect growth contribution 

?

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