Kathmandu. Google’s parent company, Alphabet, lost more than $500 billion in market value in one day. Alphabet’s share price fell to its lowest point in 6 months on Thursday as Wall Street investors became disappointed after the company released its final business report of the year.
Investors are worried after the company disclosed that the summaries prepared using artificial intelligence (AI) in Google’s search engine are affecting the income from advertising. This week, Microsoft and Amazon also released details of their commercial progress. All these three technology companies have put forward a plan to invest a large amount of money in AI competition.
However, it seems that investors are worried about the impact of the large investment in AI on the growth and income potential of the companies’ core business.
At first glance, Alphabet’s quarterly financial results do not look weak. Compared to the same period last year, the total income of the company increased by 25 percent to 127 billion 600 million dollars.
The expansion of Google Cloud business has contributed significantly to the increase in income. The company said that the income of the business increased by 103 percent to about 31 billion dollars. However, despite the increase in income, there has been a significant decline in the company’s profit. Alphabet’s profit decreased by 25 percent during the quarter under review.
Similarly, Alphabet has shown negative free cash flow for the second time since becoming a public company. This time, the company’s free cash flow is more than $9 billion negative. This amount is almost double compared to three months ago.
Investors have started raising questions about the company’s future earnings potential after rapid investment in AI technology and its impact on the search business, which is considered to be Google’s main source of income.