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Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you to subscribe to our reporting here.
Greetings! In earnings season, which we’re in the midst of right now, no (bad) news is good news. Google delivered middling growth for the first quarter, with revenue rising 12%, in line with the fourth quarter, despite a noticeable slowdown in its cash machine of search and in YouTube ads. But despite the ever-present worries about President Donald Trump’s tariffs dampening the economy, Google Chief Business Officer Philipp Schindler said the company saw “broad-based strength” in ad spending across industry sectors in the quarter and declined to speculate about the economic outlook for the second quarter. Otherwise, Schindler and CEO Sundar Pichai seemed to please investors with plenty of upbeat comments about spending by businesses on artificial intelligence products at Google Cloud, as well as the positive impact of Google’s AI search features on ads. Google stock was up 4.4% in after-hours trading. That’s fair enough. As foreign exchange fluctuations shaved a couple of points off Google’s overall growth rate, the slowdown in search might have been driven more by forex than by anything fundamental, like competition from AI chatbots (which is what everyone is worrying about). To the contrary. Schindler said “commercial” queries—searches that drive ads—had increased thanks to Google’s new AI overviews feature in search. One question is whether that will last. This week in court in the Google search antitrust case, a Google executive on the witness stand, Sissie Hsaio, recounted concerns raised by Google’s ads chief Vidhya Srinivasan that cannibalization of commercial queries by AI chatbots was inevitable—although Hsaio noted that shift may depend on whether AI chatbots get better at helping consumers buy things. So that may be a medium-term threat. But investors have other, nearer-term reasons to worry about Google’s financial performance. There’s the prospect of an economic downturn hitting advertising. Also, Google executives warned that the company’s solid profit margins are likely to be affected by rising depreciation expense, thanks to fast-rising spending on new chips and servers. Google’s head count is also expanding—it reached 185,719 at March 31, up from 183,323 at the end of December—and Chief Financial Officer Anat Ashkenazi indicated more growth is to come. (Layoffs are also happening, possibly diluting the impact of the hiring.) Google is continuing to invest heavily in capital expenditures for AI. You can see how the financial picture could look very different later this year. The AI chatbot boom is shaping up to be quite the windfall for phone makers—even smaller brands like Motorola. On Thursday, AI startup Perplexity announced a partnership with Motorola to install Perplexity’s app on Motorola devices, a move aimed at boosting Perplexity’s audience. The deal also gives new owners of Motorola phones three months of the Perplexity Pro subscription free. Google has negotiated a similar deal with Motorola for Google’s Gemini AI app, a Google executive testified this week at a trial in Washington aimed at deciding how the tech giant’s operations will be overhauled to fix its illegal search practices. (The Justice Department, which sued Google on antitrust grounds, wants to stop Google using these deals to lock up app distribution.) CNBC reported today that Motorola is also partnering with Microsoft Copilot and Meta Platforms for AI services to handle certain queries. While not every company in these partnerships is necessarily paying Motorola, there’s a reasonable chance some are—particularly those that need the audience more. For once, Motorola is getting some love. • Comcast reported a 13% drop in net income and marginally lower revenue for the first quarter, as its cable TV and broadband businesses both suffered customer losses (more here). • Volkswagen said that it will start supplying robotaxi rides for Uber in multiple U.S. cities starting with Los Angeles next year. • Intel shares dipped 7% in after-hours trading after Lip-Bu Tan, a former Intel board member who took over as CEO in March, said the chip firm expects revenue and gross margin to decline in its current quarter due to a “volatile and uncertain macroeconomic environment.” • The National Highway Traffic Safety Administration on Thursday announced it was exempting U.S. autonomous vehicle developers from federal safety standards, expanding an exemption that had previously only applied to foreign companies (more here). • The Federal Reserve Board announced on Thursday that it has withdrawn its crypto guidance issued during President Joe Biden’s administration, completing an industry-friendly pivot by all three federal banking regulators. • Meta Platforms has laid off more than 100 employees in its augmented reality and virtual reality unit, Reality Labs, Bloomberg reported Thursday. The Information Weekend covers what happens when Silicon Valley logs off—the trends and people shaping culture, technology and everything in between. Subscribe for free today.
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