Wikipedia Editors: The Unsung Heroes Keeping the Website Relevant Amidst AI and Government Threats

Wikipedia editors, a group of unsung heroes, maintain the website as one of the last best places on the internet. With over four billion page views monthly, volunteers write and edit articles, remove vandalism and misinformation, and add citations. However, the rise of AI chatbots threatens the website's survival, with editors fearful that people will no longer need Wikipedia. Despite the challenge, editors remain committed to maintaining the website's integrity and relevance.

Alphabet Inc. (NASDAQ:GOOGL) has been a dominant force in the tech industry for years, with its core businesses in Google Search, YouTube, Android, and Google Cloud. However, the rise of AI chatbots like ChatGPT has raised concerns about the company's future, particularly regarding its search engine dominance. Despite these challenges, Alphabet is integrating AI tools into its popular products to narrow the gap with competitors like OpenAI.

The Search Engine Problem

Google Search, which generates over 50% of Alphabet's revenue, has been a primary concern. While the search engine's popularity has not declined, the rise of AI chatbots like ChatGPT has raised questions about its long-term viability. However, Alphabet is fighting back by enhancing its search engine with AI tools. For instance, AI Overviews, which are short summaries that pop up in search results, have driven an additional 10% more queries globally [1]. The AI Mode, a new search experience that combines search links with chat answers, is already used by over 100 million users in the U.S. and India [1].

Expanding AI Capabilities Across Products

Alphabet is not just focusing on improving its search engine. The company is also integrating AI into its other products. For example, in YouTube, AI is being used to improve recommendations and auto-dubbing, which can increase the potential audience for creators and brands [1]. In Google Photos, a new feature that turns photos into videos using AI has been well-received by users [1]. Similarly, in Android, new AI features are being rolled out, and in Search Ads, AI Max and Search have increased conversions by 14% [1].

Google Cloud: A Growing Powerhouse

Alphabet's Google Cloud business is also growing rapidly, driven by the demand for AI and the unique TPUs (Tensor Processing Units) the company provides. TPUs are crucial for AI training and inference, and Alphabet offers two types: TPU v4 for massive AI training and TPU v5e for cost-efficient inference [1]. The company's cloud segment delivered 33% YoY growth in Q2, with operating income reaching $2.8B, representing a 20% margin [1].

Valuation and Growth

Despite its impressive growth, Alphabet's valuation is relatively low compared to its peers. The company reported $96.5B in revenue in Q2, with a P/E of 21.35x, compared to the S&P 500's P/E of 29.78x [1]. Alphabet's $95 billion in cash and $85B in CapEx investments demonstrate the company's commitment to leading in AI and maintaining its position as a leading technology company [1].

Conclusion

Alphabet's integration of AI tools into its popular products and its strong growth in the cloud sector suggest a promising future. While the company faces challenges from AI chatbots, its ability to innovate and maintain its leadership in technology makes it a compelling long-term investment, especially at its current valuation.

References

[1] https://seekingalpha.com/article/4804731-alphabet-ai-fightback-a-long-term-bet-at-a-discount