Alphabet, Google’s parent company, kicked off 2025 with a solid earnings report. Despite global economic concerns and trade tensions, the company beat analyst expectations across the board. Its core businesses—Search, YouTube, and Cloud continued to grow, showing strong momentum and revenue. However, with a massive upgrade in AI infrastructure, emissions have risen. Can Google still meet its net-zero target?
Alphabet’s Revenue Jumps Amid Economic Uncertainty
Alphabet reported $90.2 billion in revenue for the first quarter. That’s a 12% increase from $80.5 billion in Q1 2024. Analysts had expected $89.2 billion. Net income came in at $34.54 billion, up 46% from $23.66 billion a year ago.
Earnings per share (EPS) hit $2.81, far above the expected $2.01. Operating income rose 20% to $30.6 billion. Plus, the company’s operating margin expanded to 34%, which is higher than last year.
CEO Sundar Pichai, confirmed by saying,
“We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full-stack approach to AI. This quarter was super exciting as we rolled out Gemini 2.5, our most intelligent AI model, which is achieving breakthroughs in performance and is an extraordinary foundation for our future innovation. Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month. Driven by YouTube and Google One, we surpassed 270 million paid subscriptions. And Cloud grew rapidly with significant demand for our solutions.”
Google Search, YouTube, and Cloud Drive Growth
Google Search brought in $50.7 billion in revenue. YouTube ads earned $8.93 billion, up from $8.09 billion a year earlier. Google Services, which includes Search, YouTube, subscriptions, and device sales, generated $77.3 billion—a 10% increase from last year.
Meanwhile, Google Cloud stood out. The cloud business earned $12.3 billion, growing 28% from $9.57 billion in Q1 2024. This growth was fueled by demand for Google Cloud Platform, AI infrastructure, and generative AI tools.
Shareholders Win Big
Alphabet didn’t just report big profits, it also rewarded investors. The board approved a massive $70 billion stock buyback plan. In addition, the company raised its quarterly dividend by 5% to $0.21 per share.
Right after the earnings release, Alphabet’s stock jumped 5% in after-hours trading. Shares hit $169, the highest level in four weeks.
AI Still the Focus Despite Trade Tensions
Even with rising costs and trade tensions between the U.S. and China, Alphabet is staying aggressive. The company confirmed it will stick to its $75 billion capital spending plan for 2025. A large portion of that will support AI infrastructure and data centers.
Analysts have raised concerns about Big Tech pulling back on data center projects. But Alphabet and its peers, like Meta and Amazon, remain committed, giving AI investment a top priority.
For now, Alphabet shows strong growth for the rest of the year.
Google’s Emissions Are Rising, Not Falling
Google aims to hit net-zero emissions across its operations and supply chain by 2030. The company is leaning on two major strategies: cutting emissions in all possible areas and removing the remaining emissions through carbon removal.
In 2023, Google’s total greenhouse gas (GHG) emissions hit 14.3 million metric tons of CO₂ equivalent. That’s a 13% jump from 2022. While the growth slowed compared to past years, the trend still moved in the wrong direction. Most of the rise came from higher energy use at data centers and emissions from its supply chain.
Scope Emissions
- Scope 1 (direct) emissions: 79,400 tCO₂e (1% of total)
- Scope 2 (indirect from electricity): 3.4 million tCO₂e (24%)
- Scope 3 (supply chain and other indirect emissions): 10.8 million tCO₂e (75%)
Although Google has made progress, its emissions increased in 2023, highlighting the challenge of scaling digital services while reducing carbon emissions. Especially with the unpredictable energy demands of artificial intelligence (AI).
Google’s Roadmap to a Net-Zero Future
Google aims to cut its emissions by 50% by 2030 using 2019 as the baseline. However, after updating how it measures emissions, the company now reports a 48% rise from 2019.
Renewable Energy
Google has run on 100% renewable energy for seven years straight. But under current standards, this hasn’t cut its market-based Scope 2 emissions. Its new goal is to run all operations on 24/7 carbon-free energy (CFE) by 2030. In 2023, it hit 64% CFE globally.
Energy Efficient Data Centers
Google’s data centers are 1.8 times more energy efficient than typical enterprise setups. In 2023, its average Power Usage Effectiveness (PUE) was 1.10, well below the industry average of 1.58.
Another example is its AI hardware, TPU v4 chips, which are 2.7 times more efficient than their predecessors.
Using AI to Slash Emissions
Furthermore, it is developing tools to reduce the energy needed to train AI models by up to 100 times. They can slash emissions by as much as 1,000 times.
Their Gemini 1.5 Pro model delivers performance similar to Gemini 1.0 Ultra but with far less computing power. Google is also guiding software developers through its “Go Green Software” initiative to shrink their environmental impact.
Practical examples of AI in action include:
- Fuel-efficient navigation, cutting 2.9 million metric tons of emissions since 2021.
- Flood forecasting tools are used in over 80 countries.
- The Green Light initiative is to optimize traffic signals.
Google is also building AI-powered systems to predict extreme heat, detect cool roofs, and track methane leaks. These tools show how AI can play a key role in solving environmental problems.
Betting Big on Carbon Removal Credits
Google knows how important it is to remove residual emissions to hit its net-zero target. That’s where carbon removal and high-quality carbon removal credits are immensely useful.
- In 2022, it pledged $200 million to Frontier, an initiative to boost carbon removal technologies by committing to buy future credits.
- Signed deals with Charm Industrial, Lithos Carbon, and CarbonCapture through Frontier. These deals represent about 62,500 metric tons of carbon removal credits to be delivered by 2030.
- Joined a U.S. Department of Energy program to match carbon removal purchases, aiming to lock in at least $35 million worth of credits within a year.
Nature-Based Solutions
Furthermore, Google has also invested in nature-based removals. To support carbon credit markets, it gave more than $7 million in grants to organizations like The Gold Standard and ICVCM.
Google’s large-scale commitments are:
- Purchased 200,000 tons of removal credits from Terradot, which uses enhanced rock weathering.
- Bought 50,000 tons from Brazilian startup Mombak, which is focused on reforestation in the Amazon.
- A partnership with Holocene to capture 100,000 tons of CO₂ by 2032.
These investments reflect its transition from short-term carbon neutrality and focusing on long-term carbon removal solutions.
Google’s environmental efforts show its huge strides in clean energy and AI-driven efficiency. Yet emissions are still rising. As 2030 approaches, the big question is, can Google truly deliver on its net-zero promise while expanding its tech empire? Only time will tell.
