Alphabet, Google's parent company, reported its 12th consecutive quarter of strong revenue growth, beating Wall Street expectations despite delays in releasing its flagship AI model, Gemini Pro. The results matter because investors are closely watching whether Alphabet's enormous AI spending is paying off, especially as rivals such as OpenAI, Anthropic and cheaper Chinese models like Alibaba's Qwen and Moonshot's Kimi K3 intensify competition in the AI race.

Alphabet, now worth around $4.2tn, posted earnings of $9.11 per share and revenue of $119.8bn for the second quarter, both ahead of forecasts, while raising its annual capital expenditure outlook to $200bn as quarterly spending doubled year on year. CEO Sundar Pichai credited AI investment for the strong performance, and Google also launched three cheaper Gemini models this week, including a cybersecurity-focused "Flash Cyber" variant to be restricted to governments and trusted partners, a move that follows OpenAI's disclosure of a serious AI-related hacking incident.