The success of Gemini has driven Alphabet’s Q2 earnings call to a major CX milestone, with its agents now autonomously resolving 75% of Google Ads support queries.
The result reflects a broader strategy to place AI across the customer lifecycle from enterprise service automation and conversational search to agentic shopping, bookings, advertising and sales enablement.
Investors will now be assessing whether Alphabet can sustain this momentum while generating returns that justify the rapidly rising cost of the AI infrastructure behind it.
Philipp Schindler, SVP and Chief Business Officer at Alphabet, explained that Google’s Gemini-powered agents are now handling the majority of Ads support queries.
“Our ads customer support teams use Gemini-powered agentic solutions that now autonomously address 75% of support queries, freeing them to solve our customers’ most complex challenges.”
The Success of Gemini Enterprise
Gemini in CX has proved substantial in Q2, as Alphabet reveal that agentic AI is now becoming an operational layer for customer service, with Google using Gemini-powered agents as the first point of contact for customer support.
With ads customer support teams now addressing 75% of support queries, AI success will be measured in high-volume handling and lowered complexity work that is completed quickly and accurately, ensuring employees on human-required queries.
Sundar Pichai, CEO of Alphabet, explained that the company’s enterprise AI strategy is increasingly focused on helping businesses embed AI into day-to-day operations.
“Gemini is transforming how millions of businesses use AI to build custom agents, automate processes, improve cybersecurity, manage customer relationships, streamline data analytics, collaborate effectively, and more,” he said.
“One of the strongest parts of our growth comes from the rapid adoption of our Gemini Enterprise platform. It’s differentiated with easy-to-use tools to build agents and automate processes, connectivity to enterprise systems, cost management, and governance tools.”
Today, successful customer service automation now depends on clear enterprise context, allowing AI agents access to business systems, customer records, governance controls, and organizational knowledge for accurate issue resolution.
AI Mode Reaches 1BN Monthly Active Users
Alphabet’s AI strategy in Q2 has significantly reshaped the customer journey, integrating AI further into search, recommendations, and transactions into a single flow.
“Since expanding AI Mode globally last October, we have surpassed 1 billion monthly active users,” Pichai emphasized.
Furthermore, the Gemini app now serves 950 million monthly active users, revealing the increasing popularity of conversational interfaces in digital customer journeys.
Alphabet is also designing commercial experiences where AI helps customers complete tasks with fewer interruptions, with users across AI Overviews and AI Mode now asking longer, more detailed questions, creating opportunities for brands to deliver more relevant advertising.
For marketers and CX teams, AI with more context can enable intent-driven conversations, matching customers more accurately with products and services at the right moments.
This includes the implementation of Universal Commerce Protocol (UCP), an open-source standard designed to enable agentic commerce across retailers, as well as Universal Cart allowing shoppers to add products from multiple retailers and complete purchases through a single experience.
These initiatives reduce the number of steps between product discovery and conversion, addressing one of the longstanding friction points in online commerce.
“Booking Holdings expanded a multi-year cloud commitment and are partnering closely to advance our AI-powered ad formats,” explained Schindler.
“It’s also deploying Google’s AI technology to enable new customer experiences like agentic dining reservations on OpenTable, helping restaurants get discovered and booked right when it matters most.”
Alphabet’s decision to embed commerce directly into AI-powered conversations is creating more continuous journeys that move from question to recommendation, purchase, and booking with fewer handoffs.
Powering Commercial and Customer Performance
Google’s AI advertising tools are helping brands respond to more complex customer buying behavior while improving marketing efficiency, an increasingly important objective as consumers interact with AI-powered search experiences rather than relying solely on traditional keyword queries.
Across search advertising, Alphabet reported that advertisers using AI Max or Performance Max achieved an average of 15% more conversions or value at a similar ROAS.
As AI models improve through understanding customer intent and matching increasingly detailed searches with more relevant creative and offers.
Across its own commercial organization, 83% of Google’s sales team reportedly now uses Gemini-assisted tools every week for 20% higher win rates, demonstrating how generative AI is becoming part of the entire customer lifecycle.
The strategy has translated to customer scalability, as nearly 90% of the Fortune 100 now use Gemini Enterprise, and Google expands its agentic solutions to meet all enterprise sizes.
“Similarly, our new agentic solutions for SMBs have expanded our reach by hundreds of thousands of new customers year to date,” Schindler notes.
These results present AI as a commercial platform capable of helping organizations improve marketing and sales performance and expand customer reach at enterprise scale.
Can CX Gains Pay Off?
From a CX perspective, Alphabet’s financial results demonstrate that its AI strategy is becoming increasingly operational, however, delivering these experiences requires unprecedented investment in AI infrastructure.
For CX leaders, this highlights that AI success will increasingly be judged by whether experiences cam generate enough commercial value to justify the underlying investment.
Thomas Monteiro, Senior Analyst at Investing.com, summarized the balance between Alphabet’s operational execution and investor concern on whether AI investments can deliver sustainable financial returns.
“The massive beat in Cloud is the clearest sign so far that the spending is converting into fast-growing, profitable revenue, with contracted deals coming online the moment capacity is built,” he said.
“Search, which was supposed to be AI’s first casualty, keeps behaving like its first beneficiary. The operating business is doing everything asked of it.
“The question the market is weighing tonight is simply whether those returns can keep growing faster than the cost of funding them against a shifting rates environment.”
As Alphabet’s AI investments continue to translate into stronger CX and commercial performance, the next challenge is proving that those gains can continue to scale as the cost of building AI infrastructure continues to rise.
Alphabet Key Earnings Results
In its quarterly earnings report, Alphabet showed strong growth in cloud and AI-led revenue growth, however the investment required to support that growth pushed quarterly free cash flow negative.
- Total revenue reached $113.8BN, increasing 24% yoy
- Google Search and other revenue increased to $32.3BN, up 17% yoy
- Google Cloud revenue jumped 82% yoy at $24.8BN, driven by demand for AI infrastructure and AI solutions
- Free cash flow dropped to a negative $6.9BN for the quarter, reflecting the accelerated infrastructure spend
