Google-parent Alphabet reported stronger-than-expected second-quarter earnings on Wednesday, saying that artificial intelligence “is positively impacting every part of the business.“The company posted a profit of $28.2 billion on revenue of $96.4 billion and announced it would boost capital spending by $10 billion this year to support rising demand for cloud services.“We had a standout quarter, with robust growth across the company,” Alphabet chief executive Sundar Pichai said, according to AFP.“AI is positively impacting every part of the business, driving strong momentum,” Pichai added.Search revenue experienced significant growth during the quarter, with new features including AI Overviews and the recently introduced AI mode showing positive results, according to Pichai.YouTube’s advertising revenue continues its upward trajectory, alongside growth in its subscription services, as reported by Alphabet.The company’s cloud computing division is projected to generate $50 billion in annual revenue, according to corporate forecasts.“With this strong and growing demand for our cloud products and services, we are increasing our investment in capital expenditures in 2025 to approximately $85 billion and are excited by the opportunity ahead,” Pichai noted.Following the earnings announcement, Alphabet’s shares increased by nearly 2 percent in after-hours trading.Analysts have been monitoring whether the organisation’s substantial AI investments are excessive and if AI-generated search summaries might reduce advertising opportunities.The company has begun testing advertisements in its new AI Mode for search, a calculated strategy to maintain competitiveness against ChatGPT whilst adapting its advertising model for AI developments.The relationship between advertising and generative AI chatbots remains a crucial consideration, as these systems have traditionally operated without promotional content. Advertising continues to serve as Alphabet’s primary revenue source.Google and its tech rivals are pouring billions into data centers and infrastructure to support artificial intelligence, but the emergence of cheaper AI models like China’s DeepSeek is raising questions about whether such heavy spending is necessary.At the same time, Google’s core business, the online advertising engine that funds much of its AI development, is under serious threat due to recent antitrust rulings in the US.