Alphabet’s artificial intelligence (AI) efforts, particularly its Gemini AI model, have recently gained momentum with several key partnerships. Snap, the parent company of Snapchat, has incorporated Alphabet’s Gemini AI model into its My AI chatbot, resulting in a significant increase in user engagement. The integration of Gemini has allowed the chatbot to process video, audio, and text simultaneously, addressing the previous limitations in processing visual content. Snap is also considering incorporating Gemini into its Spectacles smart glasses.
Warner Bros. Discovery has also embraced Gemini, utilizing the AI model to generate captions for unscripted programming on its Max streaming service. This move is expected to reduce captioning costs by half and significantly decrease the time required for captioning. The project was developed using Google’s Vertex AI platform.
In addition, Alphabet announced a partnership with Volkswagen to develop a new AI smartphone assistant. By incorporating vehicle maintenance data from Volkswagen owners’ manuals and YouTube videos into Gemini, the AI assistant aims to provide relevant information to VW owners, such as instructions on changing a flat tire. The assistant will initially be available for Atlas SUV models before expanding to other models.
Alphabet has also secured new and expanded AI Gemini deals with companies including Best Buy, Scotts Miracle-Gro, Telecom Italia, and UPS Capital. These partnerships demonstrate the growing recognition and adoption of Alphabet’s AI capabilities.
While Alphabet’s Gemini AI has faced criticism in the past, these recent wins highlight its strengths and dispel the notion that it lags behind rivals like OpenAI. The success of the Snap deal, in particular, showcases Gemini’s superiority in video and image processing. Furthermore, Alphabet’s Google Cloud division has experienced significant growth in its AI capabilities, with customers leveraging its infrastructure to build their AI capabilities.
Alphabet’s dominance in search, as well as its ability to effectively monetize ads, remains unparalleled. The recent antitrust suit between the U.S. and Google highlighted Apple’s affirmation that no amount of money could entice it to switch from using Google as its default search engine. New AI search competitors lack the user base necessary for effective ad monetization, giving Alphabet an opportunity to capitalize on the 80% of its search traffic currently untapped by ads.
With Alphabet’s stock trading at an attractive valuation, boasting a low forward price-to-earnings ratio (P/E) of 18 and a price/earnings-to-growth ratio (PEG) of under 0.7, the company presents an enticing investment opportunity. Gemini’s growing momentum, coupled with Alphabet’s strong position in the market, makes it an appealing choice for investors.