Meta and Alphabet's AI Strategies: One Achieving Success

Meta Platforms and Alphabet are two companies with digital advertising cash cows aiming to utilize AI. However, only one is executing correctly: increasing the cash cow to fund AI by using AI to enhance its advertising business. Alphabet's success in AI is evident through its Google subsidiary, which is consistently developing and improving AI technologies to drive revenue growth.

Meta Platforms and Alphabet Inc. (NASDAQ:GOOGL) are two tech giants leveraging AI to boost their advertising revenues. While both companies are investing heavily in AI, only Alphabet has effectively integrated AI to enhance its advertising business. This article examines their strategies and the impact of AI on their respective cash cows.

Alphabet Inc., through its Google subsidiary, has been at the forefront of AI development. In August 2025, the company announced an additional $9 billion investment in Oklahoma to expand cloud and AI infrastructure [1]. This investment, which includes a new data center campus in Stillwater and expansion of its Pryor facility, is part of a broader $85 billion capex plan for 2025 [1]. Google's AI initiatives are not limited to infrastructure; the company has also committed $1 billion to AI education and training for U.S. higher education institutions and nonprofits [1].

Meta Platforms, on the other hand, is focusing on enhancing user safety and engagement through AI. The company's AI push has led to improvements in content quality, resulting in a 5% increase in time spent on Facebook and a 6% increase on Instagram in the second quarter of 2025 [2]. Meta has also introduced new features and anti-scam tools in WhatsApp to combat online fraud [2]. These efforts are driving user engagement and boosting ad revenues. In the second quarter of 2025, Meta's advertising revenues increased by 21.5% year over year to $46.56 billion [2].

However, Alphabet's success in AI is more pronounced in its advertising business. Google's AI technologies, such as Gemini 2.5 and AI Overview, are significantly improving search dominance and engagement [1]. This has led to a 10.4% year-over-year increase in Google's advertising revenues to $71.34 billion in the second quarter of 2025 [1]. In comparison, Meta's advertising revenues, while growing, are still lagging behind Alphabet's.

Both companies are facing tough competition for advertising dollars. Alphabet, Amazon, and Meta are all vying for a larger share of the market. However, Alphabet's strategic use of AI to enhance its advertising business has given it a competitive edge. Meta, while making significant strides in AI, still needs to effectively integrate AI into its advertising operations to match Alphabet's success.

References:

[1] https://finance.yahoo.com/news/alphabet-googl-boosts-capex-9b-231941472.html
[2] https://finance.yahoo.com/news/meta-focuses-user-safety-engagement-162800262.html