Alphabet: Technical Paper on Energy Consumption Supports Our Cost Advantage Thesis
Despite Alphabet stock being up more than 40% from its April lows, we view it as undervalued.
On Aug. 21, researchers at Google published a technical paper that delineates the energy cost profile of a median Gemini text prompt. The headline number, 0.24 watt-hours of energy consumption, is materially lower than many commonly cited estimates.
Why it matters: We see Alphabet GOOG having a clear cost advantage in deploying artificial intelligence, due to its vertically integrated tech stack that includes its AI accelerators. Further, we believe that over time, this cost advantage will let Alphabet deploy AI across its businesses.
