The Intelligence from The Economist Too big tech: is Alphabet approaching a growth ceiling?
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Aug 4, 2023 
Business editor Jan Piotrowski discusses the growth challenges facing tech giants like Alphabet, amid concerns of slowing returns and a struggling digital ad market. Meanwhile, Sophie Pedder sheds light on France's surprising economic vitality despite political turmoil, showcasing its strong GDP and luxury sector. The podcast navigates these intriguing contrasts, raising questions about future growth for tech firms and the resilience of the French economy as it balances prosperity with persistent social unrest.
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Big Tech Growth Ceiling
- Alphabet's exceptional growth, like other tech giants, poses a challenge for future expansion.
- Sustaining their current rate would require adding $84 billion in revenue, exceeding the total revenue of many S&P 500 companies.
Maturing Digital Advertising
- Alphabet's core digital advertising business is maturing, limiting growth potential as it now constitutes two-thirds of all advertising.
- The overall digital advertising market growth is slowing, impacting Alphabet's revenue stream.
AI's Uncertain Monetization
- While Alphabet possesses strong AI capabilities and is launching new AI tools, the monetization of AI-assisted search remains uncertain.
- The company hasn't fully committed to AI, despite the hype around competitors like OpenAI and Microsoft's Bing.