Google bets on Artificial Intelligence

Technologies like artificial intelligence and machine learning can make huge difference to everyday life and Google is investing in bringing these to “as many people and as fast as possible” were the words of Google CEO Sundar Pichai when he met with the alma mater of IIT Kharagpur.

Google(NASDAQ:GOOG) in 2014 purchased London based artificial intelligence company Deepmind for about $600 million. It made news recently when AlphaGo was able to beat professional human player of the board game Go. AlphaGo was feeded with 30 million historical moves from the tournament and it was left to challenge itself. To test Google first invited the three time European Go champion Fan Hui to their London office in October 2015. In the closed door game AlphaGo was able to beat 5 games to 0. It was the first time a computer program has even beaten a professional Go player.

In March 2016 it again played against Lee Sedol who is the top Go player in the world. AlphaGo was able to win the game 4 games to 1. Deepmind is yet to make money but it could be one of the revenue drivers in the future. Google is trying to teach computers to mimic the thought process of human brains and learn from the past mistakes.

Another important field which DeepMind is being tested is in the field of medicine. They are trying to detect diabetic retinopathy. Diabetic retinopathy if not treated at the right time can lead to blindness. Early detection will be a boon to the medical world. Google is working with National Health Service (NHS) in collaboration with Moorfields Eye Hospital in east London to build machine learning system which will help to detect diabetic retinopathy from just a digital scan of the eye. DeepMind has been given access to one million images from historical eye scans along with patient data. Off course personal data will not be shared with the company. It is being trained to scan the eye and detect early issues.

Source: investing.com

Google released its results on January 26, 2017. In the words of the company’s CFO Ruth Porat.

“Our growth in the fourth quarter was exceptional — with revenues up 22% year on year and 24% on a constant currency basis. This performance was led by mobile search and YouTube. We’re seeing great momentum in Google’s newer investment areas and ongoing strong progress in Other Bets,”

Financials

The company reported revenues of $26.06 billion up 22% y-o-y. Operating income was $8.48B when compared to $6.81B for last year, operating margin of 33% when compared to 32% for last year. Net income came at $6.59B when compared to $6.04B. Cash at the end of the quarter was $86.33B. Google segment revenue came at $25.80B vs $21.17B, operating income of $7.88B vs $6.74B for last year and other bets segment revenue of $262M vs $150M for last year, operating loss for other bets segment of $1.08B vs $1.21B. EPS came at $9.36 when compared to $8.67 for last year.

So it would be interesting to watch how artificial intelligence would play a major role at Google in the future.

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