Alphabet reported a 14 percent year-over-year revenue increase to $96.4 billion, propelled largely by growth in the Google Cloud and Google Search divisions. Artificial intelligence had a significant impact across the board, including in spending. Capital expenditure is expected to be roughly $85 billion in 2025, compared to $52.5 billion in 2024. Google Cloud generated $13.6 billion in Q2, up 32 percent from the same period last year. Advertising sales totaled $71.3 billion for the quarter, a 10.4 percent improvement from the year earlier frame. Google Search, which is integral to advertising sales, was up 11.7 percent.

“Google’s results are unique in that its cloud division, which sells computing power in data centers, is a beneficiary of the AI boom, while its search business faces threats from users who are migrating toward AI products such as OpenAI’s ChatGPT,” The Wall Street Journal reports, noting “other areas of the company are spending at a fast clip to bring AI tools into its popular products like Search and YouTube.”

YouTube ads increased 12 percent to nearly $9.8 billion in Q2, dwarfed by “Google Search & other” advertising of $52 billion.

Total operating income increased 14 percent year-over-year, while operating margin was a robust 32.4 percent for the quarter, according to the company’s earnings release. Sundar Pichai, CEO of Alphabet and Google, called it “a standout quarter” that saw the company “leading at the frontier of AI and shipping at an incredible pace.”

On a call with investors, Pichai name-checked the Gemini 2.5 family of hybrid reasoning models and the company’s Veo 3 video generation model, indicating “9 million developers have now built with Gemini” and mentioning Veo 3 as “a viral hit” with more than 70 million clips shared after being created with the Gemini app and AI filmmaking tool Flow.

“Google’s Gemini app has grown to 450 million monthly active users,” notes TechCrunch, writing that “AI Overviews — a Google Search feature offering an AI summary of search results available in 200 countries and territories — now has 2 billion monthly users, up from 1.5 billion in May 2025.”

Pichai said AI Mode — a chat experience for Google Search — has over 100 million monthly active users in its initial launch in the U.S. and India as the rollout continues.

WSJ says Google executives went out of their way to “allay shareholder concerns about the future of its search business, even if traffic volume declines,” and mentioned the antitrust lawsuit involving Google Search dominance that a U.S. district judge is expected to rule on next month, including potentially “putting curbs on how it competes in AI.”