Alphabet — Business Overview

What does Alphabet do?

Alphabet is essentially Google, organized into three reporting segments plus a centralized AI research unit. The vast majority of its business flows through Google, but Alphabet also houses a collection of early-stage "moonshot" companies under the Other Bets umbrella. With 190,820 employees as of December 31, 2025, it is one of the largest technology companies in the world.

Here is a breakdown of its segments:

How does Alphabet make money?

Advertising is the dominant engine, built on Google's massive reach across Search and YouTube. Google Services sells two types of ads: performance advertising (text-based ads users click on, driving direct actions like purchases) and brand advertising (video and display ads designed to build awareness). Advertisers pay to reach users across Google Search, YouTube, and a network of third-party websites and apps. This advertising franchise is supported by AI tools like Performance Max and Demand Gen, which help advertisers optimize their spending.

Beyond ads, Google Services collects revenue from subscriptions, app sales, and hardware. This includes YouTube TV, YouTube Music and Premium, NFL Sunday Ticket, and Google One (which now bundles access to Gemini AI models). Google Play earns a cut from app purchases and in-app transactions, while the Pixel device line generates hardware revenue.

Google Cloud generates revenue through consumption-based fees and subscriptions. Businesses pay for what they use — whether that is running AI workloads on Google's custom TPUs (Tensor Processing Units, chips Google designed specifically for AI tasks) and GPUs, accessing the Vertex AI development platform, or using Gemini-powered tools inside Google Workspace. Other Bets currently generates a smaller revenue stream, primarily from Waymo's autonomous ride-hailing services and internet services.

What market does Alphabet operate in?

Digital advertising is Alphabet's core market, and it remains large and growing, though increasingly competitive. The internet advertising market is driven by the ongoing shift of marketing budgets away from traditional media (TV, print, radio) toward digital channels. AI is accelerating this shift by making ad targeting and measurement more precise. Alphabet competes not just with other online ad platforms but with every medium advertisers might spend money on.

Cloud computing is the second major market, and it is one of the fastest-growing in technology. Enterprises worldwide are migrating workloads off their own servers and onto cloud platforms. AI is a powerful accelerator here: companies need significant computing infrastructure to train and run AI models, and cloud providers like Google Cloud are the primary suppliers of that infrastructure. The market is growing rapidly, driven by AI adoption.

AI itself is an emerging platform that cuts across all of Alphabet's markets. The filing describes AI as "a profound platform shift," and Alphabet is positioning itself as a full-stack AI company — from custom chips and data centers all the way up to consumer-facing products like Search and the Gemini app. All 15 of Alphabet's products with over 500 million users already use Gemini models.

Who are Alphabet's main competitors?

The competitive landscape is wide, spanning many different industries. The filing identifies a notably broad set of rivals:

• Search and information: General-purpose search engines and AI-native answer engines
• Online advertising: Social networks, streaming services, e-commerce platforms, and traditional media
• Vertical search: Travel, jobs, and health-focused platforms that bypass Google entirely
• Cloud computing: Other major enterprise cloud providers
• AI models and products: Developers and providers of competing AI models and applications
• Consumer hardware: Device makers with their own proprietary software platforms
• Productivity software: Workspace and communication tool providers

Alphabet's claimed competitive advantages rest on scale, infrastructure, and AI research depth. The company has invested more than $200 billion in research and development over the last five years. Its custom TPU chips (now in their seventh generation, called Ironwood) give it differentiated, lower-cost AI computing. Gemini models are embedded across its entire product ecosystem, creating a flywheel where more users generate more data to improve the models. The sheer reach of products like Search, YouTube, Android, and Chrome gives Alphabet distribution advantages that are difficult to replicate.

The industry is a mix of concentrated and fragmented dynamics. In search and online advertising, a small number of very large platforms dominate. In cloud computing, three major providers hold most of the market. In AI models, the field is more fragmented and rapidly evolving, which the filing acknowledges as an area of genuine competitive uncertainty.

Where does Alphabet operate?

Alphabet is a global business headquartered in the United States, with products and infrastructure deployed worldwide. Google Search, YouTube, Android, and Chrome are used in virtually every country where internet access exists. Google Cloud serves enterprise customers across major economies globally.

The filing does not break out specific international revenue percentages in the Business section, but it does note that Alphabet faces a complex and growing web of regulations from governments around the world — particularly in the European Union — covering areas such as competition, data privacy, AI, and content moderation. Regulatory compliance costs and the risk of being forced to change business practices in specific jurisdictions are flagged as meaningful business considerations.

Waymo, currently the most prominent Other Bets company, is expanding beyond the US. The filing notes that Waymo is entering international markets in addition to scaling its domestic autonomous ride-hailing operations across multiple US cities.