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Google unveiled a range of AI tools for enterprise customers at $30 a month. The announcements were made during Google’s Next conference in San Francisco.
Among the highlights, Google introduced an updated version of its custom AI chips and introduced an enterprise-scale tool for watermarking and identifying images generated using AI.
Nvidia’s (NASDAQ:NVDA) CEO made an appearance to highlight a new AI collaboration between the two companies. This partnership aims to provide Google’s cloud customers with enhanced access to technology that utilizes Nvidia’s high-performance H100 GPUs.
“Our expanded collaboration with Google Cloud will help developers accelerate their work with infrastructure, software and services that supercharge energy efficiency and reduce costs,” Nvidia CEO Jensen Huang said in a blog post.
Additionally, tools for enhancing security and improving office productivity were unveiled. This wave of announcements is a response to Google’s desire to showcase its AI plans, prompted in part by Microsoft’s (NASDAQ:MSFT) ambitious AI strategy introduced last year.
“We’ve generally told enterprise customers, ‘Go slowly and methodically because it’s important that you treat this as a strategic software development.’ There’s been this sort of FOMO of, ‘I need to be in generative AI for generative AI’s sake’,” Google Cloud chief Thomas Kurian told Reuters.
Google also disclosed updates to its core AI infrastructure, improving its performance and capabilities. For instance, the new version of its text model, PaLM, enables users to process longer documents such as legal briefs and books more effectively by accommodating larger amounts of input text.
Furthermore, Google introduced AI enhancements to its suite of office software and security tools. Notably, it unveiled an AI-powered tool designed to facilitate the transition of databases from Oracle (NYSE:ORCL) to an open-source version, a task known for its complexity.
Alphabet shares closed 2.7% higher yesterday.
What analysts are saying about Google’s AI-focused event
JPMorgan analysts: “While the keynote was more heavily focused on product advancements & related live demos than on new product announcements, we come away encouraged to see Google beginning to make Vertex AI & Duet AI generally available just months after they were introduced at Google I/O 2023. Overall, the event reinforces Google’s strong AI positioning within Cloud, and we expect Google Cloud to remain a key driver of GOOGL’s top-line growth & margin improvement.”
Citi analysts: “We believe Google is successfully leveraging its core GenAI capabilities to build a more competitive GCP. We were impressed to hear demand for GCP’s Vertex GenAI Projects rose +150x from April to July and that Vertex AI customer accounts rose +15x in 2Q. And with 10M+ Google Workspace customers and Duet AI’s integrated launch across Workspace and GCP, we believe Duet AI’s $30/month subscription could be material over time.”
BofA analysts: “We believe the event will help to reduce remaining overhangs on Google Cloud AI capabilities (GOOG up 3% vs NASDAQ vs 2%) as Google Cloud is integrating a variety of LLM models and NLP capabilities. We maintain our Buy rating and see Cloud as a positive driver for stock given: (1) strong gen-AI capabilities; (2) early signs of customer traction (AI projects up 150x in the last three months); (3) improving margins; (4) market share gains; and (5) more meaningful valuation contribution on 2025 revenues ($300- 400bn in cap).”
JMP analysts: “We view Google Cloud Next as one of the most public product roadmaps for moving AI into everyday applications and workflows, and with Google showing progress on productizing its AI advancements, we come away more convinced that AI can be a driver of technological evolution over the next decade while we continue to view Google as a leader in AI with benefits accruing to GCP, more relevant search, and cost efficiencies.”
KeyBanc analysts: “Continuing the theme of 2023, AI featured heavily across presentations and announcements at Google Cloud Next. Whereas the majority of investor focus has deservedly centered around opportunities and threats for the core Ads business, we believe scaling Cloud remains a key swing factor toward medium-term revenue and EPS revisions.”
