AI-First. We start with artificial intelligence, as Sundar has done the last five consecutive quarters. He continues to make it more than apparent that AI is essential to Google’s vision and will be a key component of their products and services. AI topics like Google Assistant, Waymo, AutoML, and AI-first hardware were highlighted on the call, but financial metrics like TAC overshadowed. Here is a look at Sundar’s opening remarks of the last five earnings calls.

• Dec-17 (today) – “Thanks, Ruth. Our teams are off to a great start in 2018 (omitting 6 lines) Technology is an incredibly dynamic industry. We have been laying a foundation for the next decade as we pivot to an AI first company powering the next generation of Google products like the Google Assistant.”
• Sept-17 – “Thank you, Ruth. We had another great quarter. (omitting 1 line) Even though we are in the early days of AI, we are already rethinking how to build products around machine learning. It’s a new paradigm compared to mobile first software, and I’m thrilled how Google is leading the way.”
• Jun-17 – “Thanks, Ruth. We had a phenomenal quarter. Google continues to lead the shift to AI-driven computing.”
• Mar-17 – “Thanks, Ruth. It’s been a terrific start to the year. (omitting 10 lines) Now, turning first to machine learning and access to information. I’m really happy with how we are transitioning to an AI-first company.”
• Dec-16 – “Thanks, Ruth. 2016 was a great year for Google and 2017 is shaping up to be even more exciting. (omitting 11 lines) First, machine learning and access to information. As I’ve shared before, computing is moving from a mobile­first to AI­-first with more universal, ambient and intelligent computing that you can interact with naturally, all made smarter by the progress we are making with machine learning.”

Cloud. Google’s cloud business is gaining momentum as the world’s fastest-growing major public cloud provider. It is now a $1B per quarter business, but it still dwarfed by AWS revenue of over $5B per quarter. Sundar says the momentum is coming from their efforts to be enterprise scale ready. “Now we can handle any type of enterprise,” he says. We expect Google’s Cloud business to continue this growth in market share.

Hardware. As the largest contributor to “other revenue,” and with 2000 new HTC engineers, hardware is becoming increasingly important to Google. Hardware shipments “doubled” this quarter which means sales of Google Home and Pixel 2 have been strong. Further, when asked about monetizing the voice platform around Google Home, Sundar said they will remain focused on the user experience rather than monetization for “some time.” This means we can expect an ad-free experience for the foreseeable future. We think Google Home’s superior AI will lead it to steal market share from Alexa in the coming years.

Waymo. Waymo was brought up several times, but details about the recent order for vehicles from Fiat Chrysler and timing on fleet deployment were danced around. Nonetheless, the excitement from Ruth, Sundar, and analysts was palpable. We expect Waymo to be the first to bring a widespread fleet online and will be tuning in to see how early deployments play out in Phoenix.

Buzzword Bingo. Over the same five quarters, we tracked how many times presenters and analysts made comments artificial intelligence by tallying instances of AI jargon (AI, artificial intelligence, machine learning, TensorFlow, natural language processing, etc).  This is evidence of the intensity level at which Google is pursuing AI.

Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.