Alphabet Acquires Data from Spirit Airlines to Fuel AI Development
On August 17, Google agreed to purchase internal data from bankrupt Spirit Airlines for $10 million, outbidding an offer from Mercor. The deal includes employee communications and business records stripped of customer information, intended as training material for Alphabet's AI models. Alphabet’s cloud division is experiencing rapid growth, with revenue up 82% year-over-year to $24.8 billion in Q2. Google Cloud now holds a significant backlog of $514 billion and has seen its operating income more than triple. The company attributes much of this success to AI advancements like Gemini Enterprise, which powers enterprise solutions for major clients. However, Alphabet’s reported net income was largely driven by an unrealized gain from its SpaceX stake, raising questions about the sustainability of earnings. Despite a 35% year-over-year drop in adjusted EPS and rising capital expenditures pushing free cash flow negative, market sentiment remains cautiously optimistic with a forward P/E of 16.78.
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Topics: AI Alphabet strategy data acquisition Google Cloud growth