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Google Leverages AI for Over 25% of New Code as Q3 Revenue Hits $88.3 Billion!

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Google’s commitment to artificial intelligence (AI) is reshaping its operational framework, with over 25% of the company’s new software code now generated by AI. This significant shift was highlighted by CEO Sundar Pichai during the recent Q3 2024 earnings call, emphasizing the deepening reliance on AI in Google’s growth strategy. Although engineers rigorously review and approve this AI-generated code, this move marks a pivotal moment in how Google integrates technology into its development processes.

Financial Performance Overview

Alphabet reported impressive financial performance for Q3, with quarterly revenue reaching $88.3 billion. The Google Services segment, which includes its flagship product, Search, generated $76.5 billion, reflecting a 13% increase from the previous year. Meanwhile, Google Cloud achieved substantial gains, bringing in $11.4 billion, marking a remarkable 35% year-over-year growth. Operating income also saw significant growth; Google Services reported $30.9 billion, up from $23.9 billion in the prior year, while Google Cloud’s operating income surged from $270 million to $1.95 billion, underscoring the profitability of Google’s AI-driven services and infrastructure.

AI Advancements in Google’s Offerings

AI advancements have become central to Google’s offerings across various platforms. In Search, new AI capabilities are enhancing both scope and adaptability. Google has introduced “Gems,” an AI-powered chatbot series built on its Gemini model, designed to provide more tailored interactions for users. Additionally, YouTube creators benefit from generative AI tools that assist with video summaries and titles, while Google Meet’s AI note-taking feature automates meeting highlight capture.

The recently launched Pixel 9 series, featuring advanced AI capabilities, has also received positive feedback from consumers and industry experts alike.

Key Enhancements to Code Generation

Google’s integration of AI extends into software development as well. The introduction of tools like Gemini Code Assist allows developers to generate code based on natural language descriptions, helping streamline coding tasks and enhance productivity. This aligns with Google’s broader strategy to leverage AI across its services, making it easier for developers to create and manage applications.

Regulatory Challenges

Despite robust earnings, Google faces increasing regulatory scrutiny and competition. The U.S. Department of Justice has labeled Google a monopoly in the search and advertising sectors, with ongoing legal proceedings entering the remedies phase. Potential outcomes could include a forced breakup of the company, which may have lasting implications for its market position.

Market Dynamics

A recent report from eMarketer indicates that Google’s share of U.S. search ad revenue could fall below 50% next year for the first time in 18 years. Amazon’s share is expected to rise to 24%, while generative AI players continue to attract advertising dollars. In response to these competitive pressures, Google has begun integrating ads into AI-generated summaries at the top of search results—a strategy aimed at maintaining its competitive edge.

Stock Performance and Market Outlook

Alphabet’s stock experienced a nearly 9% drop in the three months leading to September, marking its largest quarterly decline since Q3 of 2022; however, it remains up by 17% for the year. Analysts estimate Alphabet’s overall Q3 revenue growth at 12.6%, reaching approximately $86.31 billion, slightly below the 13.6% growth seen in the prior quarter.

YouTube has also been affected by advertisers shifting budgets toward ad-supported streaming services such as Netflix and Amazon Prime Video. YouTube’s revenue likely grew by 11.5% in Q3, down from a 13% increase in Q2; however, analysts at Truist suggest that YouTube TV may have benefited from increased political ad spending during this quarter.

Bright Spot: Google Cloud

A notable highlight for Alphabet is Google Cloud, which is expected to achieve a remarkable 29.2% growth rate, representing the largest jump in seven quarters as companies increasingly invest in its AI offerings, including the Vertex AI platform that allows customers to leverage Google’s advanced AI models or develop custom solutions.

Strategic Focus on Cost Management

With Ashkenazi’s new role as CFO, there is heightened focus on cost management amidst rising competition and regulatory challenges. Analysts speculate about potential cost-cutting measures beyond Alphabet’s limited layoffs planned for 2024. The financial community will closely monitor Ashkenazi’s strategies to contain rising expenses while sustaining competitive investments in AI.

Conclusion

As Alphabet prepares for its quarterly earnings report, the anticipated slowdown in revenue growth highlights challenges posed by increasing competition and regulatory pressures. While Google Cloud shows promising growth driven by AI demand, Alphabet must navigate these pressures carefully to maintain its leadership position in digital advertising and cloud computing.

The evolving landscape will require innovative strategies and continued investment in technology to ensure long-term success amidst a rapidly changing market environment. With over 25% of new code being generated by AI, Google is not only adapting but also setting a precedent for how technology can enhance operational efficiency across various sectors of its business.

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Blissclub Raises INR 33 Crore in Fresh Funding Months After Layoffs

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Blissclub, the women-centric D2C apparel brand, has raised INR 33 crore in a Pre-Series B funding round led by Elevation Capital, with Eight Roads Ventures also participating. This funding comes just three months after the company laid off 18% of its workforce-about 21 employees from creative, sales, marketing, growth, and product teams-due to high cash burn and challenges in securing new capital.

The latest investment was made through the allotment of 16,076 compulsory convertible preference shares (CCPS) at a premium of INR 20,428 each. Elevation Capital invested INR 19 crore, securing a 24.5% stake, while Eight Roads Ventures contributed INR 14 crore, raising its stake to 15.79%. The capital will be used for working capital, capital expenditure, and general corporate purposes.

Founded in 2020 by Minu Margeret, Blissclub started as an online activewear brand for women and has since diversified its product range and established offline stores. Despite recent restructuring, the company’s revenue grew 27% to INR 86.9 crore in FY24 from INR 68.3 crore in FY23, though net losses also increased to INR 43.9 crore.

Blissclub’s successful fundraising, despite recent layoffs, underscores both the ongoing challenges and the resilience of India’s D2C startup sector in a difficult funding environment.

 

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Apple to Shift Entire US iPhone Assembly to India by 2026

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Apple is set to relocate all assembly of iPhones destined for the US market from China to India by the end of 2026, marking its biggest manufacturing shift in decades. The move is driven by escalating US-China trade tensions and steep tariffs—up to 145% on Chinese imports—making Chinese assembly increasingly costly for Apple. Although some smartphone imports are temporarily exempt, a 20% duty still applies to Chinese-made iPhones entering the US.

 

India, in contrast, offers a more favorable trade environment, with a paused 26% reciprocal tariff and ongoing negotiations for a bilateral trade deal with the US that could shield Indian exports from future levies. Apple plans to more than double its current iPhone output in India, aiming to assemble over 60 million units annually for the US market. The company already produces about 25% of its global iPhones in India, working with partners like Foxconn, Tata Electronics, and Pegatron.

 

This shift is part of Apple’s broader strategy to diversify its supply chain and reduce reliance on China amid geopolitical risks. However, the transition’s success will depend on how quickly India can scale up its manufacturing capabilities and the outcome of ongoing trade negotiations.


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PhonePe’s PINCODE Launches 10-Minute Medicine Delivery in Cities

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PhonePe’s PINCODE app has launched a 24×7 online medicine delivery service in Bangalore, Mumbai, and Pune, promising delivery of both prescription and over-the-counter medicines within 10 minutes from nearby local medical shops. Unlike conventional e-pharmacies that use dark stores, PINCODE partners exclusively with neighborhood pharmacies, enabling faster deliveries and supporting local businesses in the digital economy.

Customers without prescriptions can select a “no prescription” option when ordering; a qualified doctor then provides a free teleconsultation and issues a digital prescription compliant with telemedicine guidelines, ensuring seamless access to medicines. The app offers competitive pricing by passing discounts from local pharmacies directly to customers and charges no delivery fees.

PINCODE’s hyperlocal model enhances healthcare accessibility and convenience while empowering local pharmacies, helping them remain integral to their communities and stimulating local economic growth. Launched in 2023, the app focuses on quick commerce with an emphasis on speed, reliability, and supporting local sellers.

In summary, PhonePe’s PINCODE app is transforming medicine delivery in major Indian cities by combining ultra-fast 10-minute delivery, free doctor consultations, and a hyperlocal sourcing model that benefits both consumers and neighborhood pharmacies.

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