Alphabet’s (NASDAQ:GOOGL) Google has enhanced its Google Slides and Drawing functionalities with the introduction of the Duet AI feature, further expanding its Google Workspace suite with generative AI capabilities.

This integration enables users to easily remove image backgrounds in Slides and Drawings by right-clicking on the image post-Crop, Replace, and Reset actions. The new “Remove background” feature is conveniently accessible from the toolbar or Format menu.

Alphabet aims to gain widespread adoption of this feature across diverse enterprises, leveraging the potential of its latest enhancement.

Strengthening Google Workspace Through Duet AI

Alphabet has consistently pursued improvements in its Google Workspace services by incorporating generative AI into the Workspace environment. The “Help me write” feature from Duet AI, previously integrated into Gmail for Android and iOS, now allows users to refine their messages with options like Formalize, Elaborate, Shorten, Write a draft, and to return to the prompt field.

Google Docs has also introduced a paid “Proofread” feature powered by AI, offering advanced suggestions for spelling and grammar, conciseness, active voice, dynamic wording, and sentence splitting.

Moreover, various Duet AI features have been introduced to Google Meet, including custom backgrounds, note-taking, action item creation, and video snippets. The AI enables real-time creation of action items and notes, with the flexibility to pause note-taking at any moment. These notes can be saved to Google Docs and shared with other attendees.

These initiatives are expected to fortify Google Workspace offerings, consequently contributing to the growth of the Google Cloud segment. In the third quarter of 2023, Google Cloud reported revenues of $8.41 billion, representing 10.9% of the total quarter revenues and reflecting a year-over-year growth of 22.5%.

Our projections estimate Google Cloud revenues for the fourth quarter of 2023 to reach $8.65 billion, indicating a year-over-year growth of 18.3%.

Growth Prospects & Competitive Landscape

Alphabet’s focus on AI-optimized infrastructure and the expansion of Duet AI offerings position it favorably in the global generative AI market. According to a report by Allied Market Research, the global generative AI market is anticipated to reach $191.8 billion by 2032, with a CAGR of 34.1% between 2023 and 2032.

The robust performance in the generative AI market is expected to bolster Alphabet’s overall financial standing and generate positive sentiment among investors. Our model projects total revenues for the fourth quarter of 2023 to be $81.95 billion, indicating a year-over-year growth of 7.8%.

Alphabet has demonstrated a year-to-date growth of 56.8%, outpacing the industry’s growth of 56.3%. Additionally, the enhanced capabilities of Duet AI position Alphabet in direct competition with Microsoft, which has seen success with its Copilot software.

Microsoft 365 Copilot, an AI assistant built on Bing Chat Enterprise, offers enterprise-grade security, privacy, compliance, and responsible AI. It addresses complex work problems by analyzing emails, meetings, chats, documents, and the web, integrating seamlessly with Microsoft 365 Apps such as Word, Excel, PowerPoint, Outlook, and Teams.

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