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Sundar Pichai, CEO of Alphabet.

Source: Alphabet

Alphabet has faced a lot of noise this year around the health of its core search business, due to a slumping digital ad market and the longer-term potential for artificial intelligence chatbots to take traffic.

In its second-quarter earnings report on Tuesday, the company showed it has any numbers of ways to succeed despite those very real challenges.

Google’s revenue rose 7% to $74.6 billion from $69.7 billion in the year-earlier period, topping analysts’ estimates. Profit was also better than expected, driving the stock price up about 6% in extended trading.

Online advertising, which has been a difficult market for the past year, remains slow because of economic concerns and corporate cost cutting. Google’s ad revenue only increased 3.3% from a year earlier, but that’s an improvement from the first quarter, when ad revenue fell. Snap’s second-quarter report was more troublesome, as the company issued a disappointing forecast, sending the stock down almost 20%.

“If you step back, you’re seeing real weakness in linear TV, ad agencies, smaller digital companies,” said Michael Nathanson, an analyst at Moffett Nathanson, on Alphabet’s investor call following the results. “Yet you guys have accelerated your growth this quarter.”

Search revenue, which makes up the majority of Google’s ad business, also saw steady growth. That’s a relief to investors, some of whom have grown concerned that traditional search users will be moving to generative AI chatbots from OpenAI and Microsoft, the startup’s main investor, for their online queries.

Microsoft’s Bing search engine integrated OpenAI’s ChatGPT early this year. However, Google’s search business still expanded, and CEO Sundar Pichai pointed to the company’s homegrown chatbot called Bard, which has been a major focus of investment in recent months.

Executives on Tuesday sounded as if there’s no where to go but up. They made dozens of references to AI on the call, trying to reassure investors that the technology is being used across the company, though Google has yet to say when its search feature, Search Generative Experience (SGE), will be widely available to the public. The company has said SGE will be able to synthesize search results from complex queries.  

Overall, AI is a boon, Pichai said.

“Over time, this will just be how search works,” he said, pointing to different search options the company is working on for users. “It really gives us a chance to now not always be constrained in the way search was working before. It allows us to think outside the box. We are ahead of where I thought we’d be at this point in time.”

Pichai gave an example of the company’s plans to automate some customer service for its products using new AI models.

But where Google can benefit no matter what happens in the ad market is on the cloud infrastructure side, where it competes with Amazon Web Services and Microsoft Azure. AI companies are flocking to Google’s cloud technology so they can run the compute-heavy projects that are only available in a few places.

Google’s cloud business, which turned profitable in the first quarter, saw revenue increase 28% in the second quarter to $8 billion, topping analysts’ estimates. Pichai said that more than 70% of so-called unicorns (generally defined as billion-dollar tech startups) in generative AI are Google Cloud customers. They include Cohere, Japser and Typeface.

“There is definitely a lot of interest from customers on AI and they definitely are engaging on many more conversations with us,” Pichai said.

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How quantum could supercharge Google’s AI ambitions

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How quantum could supercharge Google’s AI ambitions

Inside a secretive set of buildings in Santa Barbara, California, scientists at Alphabet are working on one of the company’s most ambitious bets yet. They’re attempting to develop the world’s most advanced quantum computers.

“In the future, quantum and AI, they could really complement each other back and forth,” said Julian Kelly, director of hardware at Google Quantum AI.

Google has been viewed by many as late to the generative AI boom, because OpenAI broke into the mainstream first with ChatGPT in late 2022.

Late last year, Google made clear that it wouldn’t be caught on the backfoot again. The company unveiled a breakthrough quantum computing chip called Willow, which it says can solve a benchmark problem unimaginably faster than what’s possible with a classical computer, and demonstrated that adding more quantum bits to the chip reduced errors exponentially. 

“That’s a milestone for the field,” said John Preskill, director of the Caltech Institute for Quantum Information and Matter. “We’ve been wanting to see that for quite a while.”

Willow may now give Google a chance to take the lead in the next technological era. It also could be a way to turn research into a commercial opportunity, especially as AI hits a data wall. Leading AI models are running out of high-quality data to train on after already scraping much of the data on the internet.

“One of the potential applications that you can think of for a quantum computer is generating new and novel data,” said Kelly. 

He uses the example of AlphaFold, an AI model developed by Google DeepMind that helps scientists study protein structures. Its creators won the 2024 Nobel Prize in Chemistry. 

“[AlphaFold] trains on data that’s informed by quantum mechanics, but that’s actually not that common,” said Kelly. “So a thing that a quantum computer could do is generate data that AI could then be trained on in order to give it a little more information about how quantum mechanics works.” 

Kelly has said that he believes Google is only about five years away from a breakout, practical application that can only be solved on a quantum computer. But for Google to win the next big platform shift, it would have to turn a breakthrough into a business. 

Watch the video to learn more.

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Nintendo Switch 2 retail preorder to begin April 24 following tariff delays

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Nintendo Switch 2 retail preorder to begin April 24 following tariff delays

An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025. 

Isabel Infantes | Reuters

Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.

Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.

Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.

Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.

“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”

The Nintendo Switch 2 and “Mario Kart World bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.

However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”

It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.

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Etsy touts ‘shopping domestically’ as Trump tariffs threaten price increases for imports

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Etsy touts 'shopping domestically' as Trump tariffs threaten price increases for imports

An employee walks past a quilt displaying Etsy Inc. signage at the company’s headquarters in the Brooklyn.

Victor J. Blue/Bloomberg via Getty Images

Etsy is trying to make it easier for shoppers to purchase products from local merchants and avoid the extra cost of imports as President Donald Trump’s sweeping tariffs raise concerns about soaring prices.

In a post to Etsy’s website on Thursday, CEO Josh Silverman said the company is “surfacing new ways for buyers to discover businesses in their countries” via shopping pages and by featuring local sellers on its website and app.

“While we continue to nurture and enable cross-border trade on Etsy, we understand that people are increasingly interested in shopping domestically,” Silverman said.

Etsy operates an online marketplace that connects buyers and sellers with mostly artisanal and handcrafted goods. The site, which had 5.6 million active sellers as of the end of December, competes with e-commerce juggernaut Amazon, as well as newer entrants that have ties to China like Temu, Shein and TikTok Shop.

By highlighting local sellers, Etsy could relieve some shoppers from having to pay higher prices induced by President Trump’s widespread tariffs on trade partners. Trump has imposed tariffs on most foreign countries, with China facing a rate of 145%, and other nations facing 10% rates after he instituted a 90-day pause to allow for negotiations. Trump also signed an executive order that will end the de minimis provision, a loophole for low-value shipments often used by online businesses, on May 2.

Temu and Shein have already announced they plan to raise prices late next week in response to the tariffs. Sellers on Amazon’s third-party marketplace, many of whom source their products from China, have said they’re considering raising prices.

Silverman said Etsy has provided guidance for its sellers to help them “run their businesses with as little disruption as possible” in the wake of tariffs and changes to the de minimis exemption.

Before Trump’s “Liberation Day” tariffs took effect, Silverman said on the company’s fourth-quarter earnings call in late February that he expects Etsy to benefit from the tariffs and de minimis restrictions because it “has much less dependence on products coming in from China.”

“We’re doing whatever work we can do to anticipate and prepare for come what may,” Silverman said at the time. “In general, though, I think Etsy will be more resilient than many of our competitors in these situations.”

Still, American shoppers may face higher prices on Etsy as U.S. businesses that source their products or components from China pass some of those costs on to consumers.

Etsy shares are down 17% this year, slightly more than the Nasdaq.

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