How Google Is Already Monetizing Its AI Services To Generate Revenue (cnbc.com) 25
Google Cloud CEO Thomas Kurian revealed the company has already made billions from AI by monetizing through consumption-based pricing, subscriptions, and upselling. "Our backlog is now at $106 billion -- it is growing faster than our revenue," said Kurian, speaking at the Goldman Sachs Communacopia and Technology Conference in San Francisco. "More than 50% of it will convert to revenue over the next two years." CNBC reports: Kurian said some people pay Google by consumption, giving the example of AI infrastructure purchased by enterprise customers. "Whether it's a GPU, TPU or a model, you pay by token -- meaning you pay by what you use," he said. Tokens represent chunks of text that a AI models process when they generate or interpret language. Some people use customer service systems, paying for it by what Kurian called "deflection rates." Such rates are priced based on the business value customers get -- things like uptime, scalability, AI features and security. Google Cloud also provides tools like a "deflection dashboard," that customers can use to track and manage agent interactions. Last month, Google won a $10 billion cloud contract from Meta spanning six years. Meta had largely been reliant on Amazon Web Services for cloud infrastructure, though it also uses Microsoft Azure.
Some customers pay for cloud services by way of subscriptions. "You pay per user per monthly fee -- for example, agents or Workspace," said Kurian, referring to the company's Gemini products, which has its own subscription tiers with various storage options, and the Google Workspace productivity suite, which also has several subscription tiers. Google One, a popular personal cloud storage subscription, offers a basic monthly service to users for $1.99 a month. Earlier this year, the company offered a new subscription tier called "Google AI Ultra," which offers exclusive access to the company's most "cutting edge" AI products with 30 terabytes of storage for $249.99 per month. Kurian gave an example of Google Cloud's cybersecurity subscription tiers, saying "we've seen huge growth in that."
Kurian said that upselling is another key aspect of Google Cloud's strategy. "We also upsell people as they use more of it from one version to another because we have higher quality models and higher-priced tiers," Kurian said. He said that once customers use Google's AI services, they wind up using more of the company's products. "That leads customers who sign a commitment or contract to spend more than they contacted for, which drives more revenue growth," he added. Kurian says it is capturing new customers more quickly too. "We've seen 28% sequential quarter-over-quarter growth in new customer wins in the first half of the year," said Kurian, adding that nearly two-thirds of customers already use Google Cloud's AI tools in a meaningful way. "Selling to existing customers is always easier than selling to new customers, so it helps us improve the cost of sales," Kurian said.
Some customers pay for cloud services by way of subscriptions. "You pay per user per monthly fee -- for example, agents or Workspace," said Kurian, referring to the company's Gemini products, which has its own subscription tiers with various storage options, and the Google Workspace productivity suite, which also has several subscription tiers. Google One, a popular personal cloud storage subscription, offers a basic monthly service to users for $1.99 a month. Earlier this year, the company offered a new subscription tier called "Google AI Ultra," which offers exclusive access to the company's most "cutting edge" AI products with 30 terabytes of storage for $249.99 per month. Kurian gave an example of Google Cloud's cybersecurity subscription tiers, saying "we've seen huge growth in that."
Kurian said that upselling is another key aspect of Google Cloud's strategy. "We also upsell people as they use more of it from one version to another because we have higher quality models and higher-priced tiers," Kurian said. He said that once customers use Google's AI services, they wind up using more of the company's products. "That leads customers who sign a commitment or contract to spend more than they contacted for, which drives more revenue growth," he added. Kurian says it is capturing new customers more quickly too. "We've seen 28% sequential quarter-over-quarter growth in new customer wins in the first half of the year," said Kurian, adding that nearly two-thirds of customers already use Google Cloud's AI tools in a meaningful way. "Selling to existing customers is always easier than selling to new customers, so it helps us improve the cost of sales," Kurian said.
Don't know about Monetization but they lost me (Score:3, Interesting)
If EVERY fucking time I search, I get "HEY TRY OUR AI SEARCH TRY TRY TRY TRY OUR AI SEARCH" then FUCK GOOGLE. May that fucking enshittified company [wired.com] die in a fucking plague.
The only thing I'll mourn is that Nazi Fuck Zuck's "Meta" didn't die first.
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Re: Don't know about Monetization but they lost me (Score:2)
If StartPage has no AI, then there likely is a way to use Google without AI.
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If EVERY fucking time I search, I get "HEY TRY OUR AI SEARCH TRY TRY TRY TRY OUR AI SEARCH" then FUCK GOOGLE. May that fucking enshittified company [wired.com] die in a fucking plague.
The only thing I'll mourn is that Nazi Fuck Zuck's "Meta" didn't die first.
When Google Search first came out and started earning boatloads of money, I asked all my friends, and not a single one was clicking on any ad links. I certainly didn't. And yet, Google was earning billions, with the billions growing every year and lasting for well over a decade. I think a similar thing is happening with AI. I do use Gemini a lot, but I don't pay for it. I don't know anyone who pays for it. And yet, Google is earning billions, with the billions growing every year.
Those hoping for an AI
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$500/mo is enough to have a kid hang flyers on a couple thousand doorknobs. If you're focusing on a specific geographic area, that's probably a more effective way to get the word out.
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If EVERY fucking time I search, I get "HEY TRY OUR AI SEARCH TRY TRY TRY TRY OUR AI SEARCH" then FUCK GOOGLE. May that fucking enshittified company [wired.com] die in a fucking plague.
The only thing I'll mourn is that Nazi Fuck Zuck's "Meta" didn't die first.
When Google Search first came out and started earning boatloads of money, I asked all my friends, and not a single one was clicking on any ad links. I certainly didn't. And yet, Google was earning billions, with the billions growing every year and lasting for well over a decade. I think a similar thing is happening with AI. I do use Gemini a lot, but I don't pay for it. I don't know anyone who pays for it. And yet, Google is earning billions, with the billions growing every year.
Those hoping for an AI bubble based on their own experiences and perspectives may find that their hopes and expectations may not be fulfilled.
I've long theorized that the biggest portion of ad revenue is generated by bots set up specifically to game the system and generate "clicks" to show the advertisers as proof they are getting what they pay for. AI allows that to explode exponentially, and I don't doubt that somewhere there's an AI feeding an AI prompts that is somehow being shown as a profit generator.
The bright spot in the AI crapflood apocalypse is it has the potential to make the web so unusable for actual humans that folks start trending
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WWW search engines for the general public are one use case. Probably the one you, personally, are most exposed to. But when people refer to "the bubble", I presume they mean the large amounts of cash flowing to endeavors unrelated to Google Search.
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Google, OpenAI and Anthropic will be fine when "nobody uses AI anymore" because they still make a huge amount of money by selling the API to companies that use AI invisible to you. The web frontends mostly try to upsell you and the pro account probably also makes not that much revenue, but at $15/MToken the APIs for top models aren't that cheap.
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Google forced all Gsuite users to pay for it. Literately, they raised the price and then went "we feel this is how much our AI offering is worth"
BS.
Gemini posts false drug info on top of results (Score:2)
This worried us quite a bit. The entire family was scouring papers and drug info searching to see if it caused something it was supposed to treat. We could
These assholes going to kill WWW (Score:2)
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The revolution will not be livestreamed
What's the profit (Score:3)
All this talk of revenue, but is the AI portion of it profitable? If it has to operate as a loss leader that does not bode well for the future of dedicated AI companies.
It's a 'backlog'. (Score:2)
Just say the expenses still outweigh the profits, Google, it's not hard - well unless they wrote it using Gemini.
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I spent $1k on Gemini tokens last month (Score:2)
To the surprise of absolutely no one (Score:2)
The path is clear, if you want to succeed you need to embrace the power of the AI in your solutions/services.
As for the naysayers .... irrelevant and ignored.
Experiencing Interruptions? (Score:1)
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I get that "Experiencing Interruptions?" popup on my home machine with uBlock origin, and my works machine with a run of the mill corporate filter - but I don't actually get any interruptions - Youtube works just fine. I suspect they know they can't identify adblockers 100% correctly - so they can't put a "You are blocking ads!" popup on when it might affect normal users who are behind filters.
Their last attempt at blocking uBlock worked for about 6 hours before it was business as ad-free usual. They would