Google CEO Touts Efficiency of Gemini Models over DeepSeek

In a move to counter the recent success of China-based AI company DeepSeek, Google CEO Sundar Pichai touted the efficiency of his company's Gemini models during Alphabet’s Q4 2024 earnings call on Tuesday, as reported by CRN.

Pichai, speaking to investors, emphasized the cost-effectiveness of Google's AI offerings compared to those developed by DeepSeek. He highlighted that the company's Gemini 2.0 Flash models are "some of the most efficient models out there, including compared to DeepSeek’s V3 and R1."

DeepSeek's rapid advancements in developing a cost-effective AI model have sent shockwaves through the tech industry, triggering a significant drop in Nvidia's market capitalization. However, Pichai maintained that Google's focus on cost-efficiency positions its offerings favorably.

"The cost of actually using it is going to keep coming down, which will make more use cases feasible," Pichai stated. "That's the opportunity space. It's as big as it comes. And that's why you're seeing us invest to meet that moment."

Despite his comments comparing Google's AI to DeepSeek's, Pichai acknowledged the impressive work done by the Chinese AI lab, calling them a "tremendous team" that has produced "very, very good work."

Google's Q4 earnings report also highlighted the company's significant investments in expanding its AI and cloud infrastructure. The company reported $12 billion in Google Cloud revenue for the quarter, representing a 30% year-over-year increase. However, this represents a slowdown from the previous quarter's 35% growth rate.

Alphabet CFO Anat Ashkenazi attributed the slower growth to a "tight supply-demand situation" and the company's efforts to bring more capacity online. She noted that the company plans to invest $75 billion in capital expenditures over 2025, with the majority allocated to its technical infrastructure, including servers and data centers.

The company also reported strong adoption of its AI offerings, with over 4.4 million developers currently using Gemini models, double the number from six months prior. Google Cloud witnessed a more than doubling of new customer commitments compared to 2023, and several deals worth over $1 billion were finalized.

Despite the impressive growth, Pichai emphasized that Google is currently focused on a free tier and subscription-based models for its AI offerings. He hinted at potential future monetization strategies but affirmed the company's commitment to prioritizing user experience.