GOOG

Alphabet Inc. (Class C)

Technology · Computer Software / Internet Services
3
/5
Moderate
BOTTOM LINE

Same fundamental risk profile as GOOGL - a leading AGI developer whose cash-cow search business is paradoxically most threatened by the very technology it pioneers; Class C shares add governance risk with no voting rights during this critical transition.

BUSINESS OVERVIEW

Alphabet is the parent company of Google and several other subsidiaries. Google dominates internet search, online advertising, mobile operating systems (Android), web browsers (Chrome), and cloud computing. Alphabet also operates YouTube, Waymo (autonomous vehicles), Verily (life sciences), DeepMind (AI research), and other 'Other Bets' ventures. The vast majority of revenue comes from digital advertising across Google Search, YouTube, and the Google Display Network. GOOG shares are Class C with no voting rights, versus GOOGL Class A shares which carry one vote per share.

REVENUE SOURCES
Google Search and Search advertisingYouTube (video platform and advertising)Google Cloud Platform (GCP) and Google Workspace (Gmail, Docs, Drive, Meet)Android operating systemGoogle Chrome browserGoogle Ads and AdSense/AdMob (advertising platforms)Google Maps and Google Play StorePixel phones and Nest smart home devicesWaymo (autonomous vehicles)DeepMind and Google AI (Gemini models)Fitbit/Pixel Watch wearables
PRIMARY CUSTOMERS

Alphabet's advertising revenue comes from millions of businesses of all sizes worldwide that purchase ads through Google Ads. Google Cloud serves enterprises, startups, and government agencies. Android and consumer products serve billions of individual users. YouTube serves both content creators and advertisers. Google Workspace competes for enterprise productivity against Microsoft 365.

AGI EXPOSURE ANALYSIS

Identical business to GOOGL. Alphabet's core Search advertising business (57%+ of revenue) is directly threatened by AGI assistants that answer questions without requiring web search. If users interact with AI agents instead of Google Search, the keyword advertising model breaks down. AI Overviews already cannibalize traditional search click-through rates. YouTube's ad model faces risk from AI-generated personalized content. However, Google Cloud benefits enormously from AI compute demand, and Google/DeepMind are leading AGI developers. Google's ad customers span all industries but skew heavily toward digital businesses, many of which are themselves AGI-vulnerable. If AGI agents handle commerce directly, search advertising loses relevance.

RISK FACTORS
  • Search ad revenue (majority of income) directly cannibalized by AI assistants and agents
  • AI Overviews reducing traditional ad click-through rates already
  • AGI-powered commerce agents could bypass search-based advertising entirely
  • YouTube threatened by AI-generated personalized entertainment
  • Google Workspace users (knowledge workers) are AGI-vulnerable
  • Open-source AI models commoditize Google Cloud AI offerings
  • Regulatory/antitrust pressure constrains AI strategy
  • Competition from OpenAI/Microsoft, Anthropic, Meta in AGI race
RESILIENCE FACTORS
  • DeepMind is arguably the world's leading AI research lab
  • Invented the Transformer architecture powering all modern AI
  • Massive TPU infrastructure purpose-built for AI training and inference
  • Unmatched training data assets (Search index, YouTube, Maps, Gmail)
  • Google Cloud growing rapidly as AI compute platform
  • Waymo leading autonomous vehicles - physical-world AI moat
  • Android ecosystem deploys AI to billions of devices
  • Deep diversification across products and revenue streams
  • $100B+ cash reserves to fund AI transition