ICYMI: Google Cloud Aiming Higher

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2:44Well, Alphabet shares, the parent company of Google, hitting a new all-time high today. You'll remember that last month, The company reported Google Cloud Revenue and Operating Income topped analyst projections. Our own Bloomberg Intelligence is Mandeep Singh, writing after earnings that Google's increased capex view by$10 billion for the full year suggests cloud segment growth is likely to remain above 30 % through the second half of the year. We've got with us Mandeep Singh. He's Global Head of Technology Research at Bloomberg Intelligence. Also joining us, Yasmin Ahmed, Managing Director of Data Cloud at Google Cloud.

3:18Both of them join us here in the Bloomberg Interactive Brokers Studio. I should note, Yasmine will be featured on an upcoming episode of the Tech Disruptors podcast with Mandeep Singh. Be sure to check that out anywhere you get your podcasts. I want to actually start with you, Mandeep, and just set the scene for us a little bit about why you want to speak to someone like Yasmine on the podcast. And she's sitting right here, by the way. She is. So she can hear you. I thank you for the shout out on the Tech Disruptors episode. Look, Google Cloud, I mean, if this was a separate company, you know,$50 billion run rate segment growing at over 30 percent.

4:00Just think about it. They could exceed, you know,$100 billion in revenue over the next two, three years. So clearly there is a lot of exciting things that are going on. And talking to Yasmin, it was pretty obvious. that, you know, they have a lot of products at the database level that are doing very well when it comes to AI agents and just how companies are looking at deploying generative AI. So let's go right there, Yasmin. Come on in to the conversation and talk a little bit about what Mandeep was saying when it comes to the AI agents and how they're utilizing Google Cloud right now.

4:37Yasmeen Ahmad:So AI agents are transforming for our customers their business as they deploy now these highly sophisticated agents that can optimize entire supply chains, that can transform how customer experience looks. If you take Wayfair, for example, they're doing visual search. So as a customer, you can upload a picture. That picture is used to find similar products in the catalog and bring those back. So Wayfair are seeing a 15 % improvement in conversion from that kind of visual search. That's why you see customers looking at how can we deploy more of these agents and new AI apps across the enterprise.

5:17Yasmeen Ahmad:So how is Gen AI also impacting the work for data scientists and data developers on that end? We see huge impact. I'll actually go back to my experience. When I first came out of university, I was a software engineer and I got given all of the mundane tasks, refactoring the tech debt, writing code labs, code tests, and it felt like a penance you had to pay. Well, with code agents and data engineering agents and data science agents, we can take all of that mundane task away and allow developers, data scientists, data engineers, to actually focus on solving business problems. In fact, Honeywell have said the use of these coding agents from Google have enabled their developers to operate 70 % faster.

6:06Yasmeen Ahmad:So huge amounts of efficiency gain, but also just an elevated role for these humans. So Yasmin, can I jump in there? So what do you think customers are replacing here given, you know, I mean, all these sounds great, but if you are an enterprise, you have to find budgets to, you know, deploy all this at scale and generative AI, as we know, is quite expensive. So what is it that they are displacing to invest in generative AI? I think generative AI is not just about augmenting new technology and bolting on more costs. In fact, the most transformative use cases actually get to the heart of a business and rewire the way work gets done.

6:49Yasmeen Ahmad:So if we look at some of our customers and use cases, for example, Optus, They are Australia's second largest telecommunications company. They've now deployed a networking agent that is actually scanning all of the network signals, identifying potential issues in the future and creating ServiceNow tickets three weeks ahead of a network issue actually happening. This is rewiring how an organization works and it helps them avoid future costs, future complexity that they would have to deal with. So you are convinced on the ROI of this journey I spend that we debate every day whether there is enough ROI?

7:30This is the question we always ask you about. So I don't know what to ask Yasmin because she interfaces with the customers day in and day out. Are you convinced on that?

7:39Yasmeen Ahmad:I am convinced because I hear the stories from our customers. But also recently we published a blog, 600 plus use cases from our customer ecosystem. Tangible use cases, delivering ROI and value. However, I also recognize many organizations are super anxious. There's a lot of anxiety around the spend on Gen.E.I. about how to get to that ROI. The customers I see succeeding and moving the fastest are those that are getting out into pilots and trying things out, finding the low hanging fruit and then building on top of that. are not hallucinating for the customers that you have deployed? Well, hallucination, a huge concern for CIOs as they deploy this technology.

8:26Yasmeen Ahmad:But this is one of the core challenges we recognized two years ago at Google. So when we built AI into our data cloud, that's actually one of the first challenges we set out to solve is AI must be grounded in business context and business data, i.e. if it can't find the answer from the business data, it can't hallucinate. It actually needs to ask you a question back and disambiguate. So solving for trust in AI has been a core part of the data and AI cloud strategy. You mentioned anxiety around hallucinations, but there's also anxiety around job displacement as a result of this technology. I hosted a dinner in Atlanta at an event that we did recently, Bloomberg Business Value of AI event.

9:11And by far, the topic that dominated the conversation was like, what is the labor landscape going to look like in the coming years as these agents displace workers even more so than they have now? How do you think about that?

9:26Yasmeen Ahmad:Being part of Google, we're 180 ,000 colleagues across the globe. We actually get to see those dynamics playing out. So on one hand, we have engineers, even at Google, we're seeing 30 to 40 % of our code now being written by Gemini. Yeah, so those entry-level coders aren't needed anymore. So we don't need to hire as many developers as we potentially historically had to do to ramp up to where the business is growing. However, on the other hand, AI has a transformational impact on business outcomes. So IHG, the hotels group, they're actually hiring developers to build the next generation of conversational booking experiences where consumers can come and chat and book holiday experiences direct.

10:12Yasmeen Ahmad:So I think this is what, I see this as a jobs shifting where skills are shifting, the types of roles are potentially shifting. It's a recalibration across the enterprise. I think recalibration is certainly fair to say. Yasmin Ahmed, Managing Director, Data Cloud at Google Cloud. Mandeep Singh, Global Head of Technology Research at Bloomberg Intelligence. Both are here in the Bloomberg Interactive Brokers Studio. That just a taste of what is to come on the Tech Disruptors podcast with Mandeep Singh. For more insights from Mandeep and the entire Bloomberg Intelligence team, check out the Tech Disruptors podcast.

10:49It features conversations with thought leaders and management teams on disruptive trends in the tech world. It covers everything from AI to EVs to VR and beyond. You can find it on Apple, Spotify, or anywhere you get your podcast.

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12:39When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience. Learn more at thehartford.com slash risk mitigation.

13:14Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.