Alphabet records first-ever $100bn quarter as AI drives growth

Google parent company Alphabet has reported its first quarterly revenue exceeding $100 billion, driven by surging demand for artificial intelligence and continued strength across its core businesses.

In the third quarter of 2025, Alphabet’s revenue rose 16 percent year-on-year to $102.3 billion, surpassing Wall Street expectations and marking a major milestone for the company founded by Larry Page and Sergey Brin in 1998.

“Alphabet had a terrific quarter, with double-digit growth across every major part of our business,” said CEO Sundar Pichai in a statement.

Net income climbed 33 percent to $35 billion, as the company credited its success to the rapid adoption of AI technologies reshaping the tech sector.

Google’s core search and advertising business remained its largest revenue source, earning $56.6 billion compared with $49.4 billion a year earlier. YouTube advertising also continued its momentum, growing to $10.3 billion from $8.9 billion.

Google Cloud was the fastest-growing division, posting a 34 percent revenue increase to $15.2 billion. Competing with Amazon Web Services and Microsoft Azure, the cloud business has become a key growth driver for Alphabet.

Pichai said Alphabet’s focus on integrating AI across its ecosystem is “delivering strong momentum,” citing the rapid rollout of AI-powered features in Google Search and the expansion of its Gemini AI models.

The company said its Gemini App now has more than 650 million monthly active users, with a growing share of search queries being handled through AI Mode.

However, the strong results were tempered by a $3.5 billion fine from the European Commission in September for competition law violations in its ad tech operations. Alphabet said that excluding the penalty, operating income would have grown 22 percent instead of the reported nine percent.

Alphabet also disclosed plans for record capital spending of $91–93 billion in 2025 to expand its AI infrastructure, including new data centers and advanced computing systems. The company indicated that capital expenditures are expected to increase even further next year.

Tech rivals Microsoft and Meta, which also released their quarterly results on Wednesday, reported similar surges in AI-related spending, with the energy-intensive infrastructure putting pressure on power grids and water resources.

Alphabet said it now has over 300 million paid subscribers across services such as Google One and YouTube Premium.

Despite the strong overall results, the company’s “Other Bets” division — which includes its autonomous vehicle arm Waymo — recorded a $1.4 billion loss on $344 million in revenue.

Alphabet’s stock has gained nearly 40 percent in the third quarter, boosted by strong financial performance and a recent legal victory. A U.S. federal judge denied a government request to force Google to sell its Chrome browser as part of an antitrust case, noting that the company faces increasing competition from AI chatbots like ChatGPT and Perplexity.

Google’s search revenue alone rose nearly 15 percent from the same period last year, underscoring the continued strength of its core business even amid a rapidly changing AI landscape.