How CEO Sundar Pichai Is Strengthening Google Around AI
Alphabet’s fourth-quarter earnings of fiscal 2025 offered a clear view into how Google is executing on its AI strategy, as CEO Sundar Pichai used the call to detail how Gemini, infrastructure and scale are reshaping the company’s core businesses.
“It was a tremendous quarter for Alphabet,” Sundar said. “The launch of Gemini 3 was a major milestone and we have great momentum.”
That momentum was reflected across Alphabet’s results. Annual revenues exceeded US$400bn for the first time, with search revenues growing 17%, YouTube annual revenues surpassing US$60bn and Cloud accelerating to 48% growth with an annual run rate of more than US$70bn.
Throughout the call, Sundar consistently framed these results as evidence that Google’s AI investments are reinforcing its business model, rather than disrupting.
He said: “Overall, we’re seeing our AI investments and infrastructure drive revenue growth across the board.”
A full-stack AI strategy built for scale
At the centre of that approach is what Sundar describes as Google’s full-stack strategy. “Our unrivaled infrastructure serves as the bedrock for our AI stack,” he said, highlighting the company’s range of compute options, from NVIDIA GPUs to Google’s own Tensor Processing Units.
As demand increases, efficiency has become a differentiator. “As we scale, we’re getting dramatically more efficient,” Sundar added.
“We were able to lower Gemini serving unit costs by 78% over 2025 through model optimisations, efficiency and utilisation improvements,” he said, underscoring how vertical integration is translating into lower costs at scale.
Gemini 3 has quickly become central to Google’s products and platform roadmap, which Sundar said has had the “fastest adoption of any model in our history”.
Since its launch in mid-November 2025, Gemini 3 Pro has “consistently processed three times as many daily tokens on average as 2.5 Pro”, he added.
From models to products
Consumer adoption has accelerated alongside that growth. “Our Gemini App now has over 750 million monthly active users,” Sundar said. “We’re also seeing significantly higher engagement per user, especially since the launch of Gemini 3 in December.”
Rather than treating Gemini as a standalone product, the CEO said: “We’re shipping innovation at scale to bring helpful AI features to people everywhere.”
In January alone, Google launched Personal Intelligence in AI Mode, introduced new AI features in Gmail, reimagined Chrome as an “AI-first, agentic browser” and announced Project Genie, which enables users to create interactive worlds in real time.
Reinforcing search and cloud
Search remains a focal point of that effort, receiving “more usage in Q4 than ever before, as AI continues to drive an expansionary moment”, said Sundar.
Google shipped more than 250 launches across AI Mode and AI Overviews in this single quarter, which Sundar said is “proving to be more helpful and are driving a greater usage”.
Cloud also delivered strong momentum, with the earnings call noting that Google exited the year with double the new customer velocity compared to Q1. By the end of December 2025, Cloud backlog had reached US$240bn.
Looking ahead, Sundar said Google is investing to meet demand already visible across its products and customers. “To meet customer demand and capitalise on the growing opportunities ahead of us, our 2026 CapEx investments are anticipated to be in the range of US$175 to US$185bn,” he said.
Closing his remarks he said: “2025 was a fantastic year for the company. We’re really well positioned going into 2026.”
