On Tuesday, Alphabet Inc. GOOG GOOGL CEO Sundar Pichai recognized the progress made by China’s DeepSeek but said that Google’s Gemini remains ahead in efficiency, cost, and performance
What Happened: During Alphabet's fourth-quarter earnings call, analyst Eric Sheridan asked Pichai about the impact of DeepSeek's AI developments.
While acknowledging DeepSeek's achievements, he said the Gemini model leads in the Pareto frontier of cost, performance, and latency, outperforming DeepSeek’s V3 and R1 models.
“If you look at one of the areas in which the Gemini models shine, it's the Pareto frontier of cost, performance, and latency,” Pichai said. “And if you look at all three attributes, I think we lead this Pareto frontier.”
He also said that the focus on inference over training is paying off.
“If you look at the trajectory over the past three years, the proportion of the spend towards inference compared to training has been increasing, which is good because obviously, inference is to support businesses with good ROIC (Return on Invested Capital).”
Why It Matters: Alphabet reported total revenue of $96.5 billion for the fourth quarter, reflecting a 12% year-over-year increase. However, this figure fell slightly short of the Street consensus estimate of $96.6 billion, as per Benzinga Pro data.
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Meta CEO Mark Zuckerberg also praised DeepSeek’s novel approaches but said his company will continue pouring investment in AI infrastructure.
Microsoft CEO Satya Nadella also appreciated DeepSeek’s innovations but did not confirm if they would lead to reduced AI costs.
OpenAI is reconsidering its open-source strategy due to DeepSeek’s growing influence. CEO Sam Altman acknowledged that DeepSeek has narrowed OpenAI’s lead in AI.
Meanwhile, Palantir advised its clients against using DeepSeek’s AI models, citing national security concerns.
Price Action: As of this writing, Alphabet’s Class A shares had dropped 7.59% in after-hours trading, while Class C shares were down 7.27%. Earlier on Tuesday, Class A shares closed 2.56% higher at $206.38, while Class C shares rose 2.50% to $207.71.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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