In a clear indication of how deeply artificial intelligence is reshaping work at one of the world’s most powerful tech companies, Alphabet CEO Sundar Pichai revealed that more than 30% of all new code at Google is now generated by AI tools — a significant jump from 25% in October last year.
Pichai shared this during Alphabet’s Q1 2025 earnings call held on April 24, when an analyst asked how the company was harnessing generative AI to boost internal productivity. “There’s been an extraordinary amount of focus and excitement internally,” Pichai said. “The early use cases have been transformative, and yet it still feels like we’re just getting started.”
The CEO emphasized that AI-generated code isn’t just about making suggestions anymore. With advanced models powering deeper workflows, Google is exploring “early agentic workflows,” aiming to make the coding experience significantly more powerful and intuitive for developers.
AI Now Powers Everything—Even Earnings Prep
AI has not only found its place in engineering but has also been embedded across all areas of Google’s operations. “It’s deeply embedded in everything we do… including the finance team preparing for this earnings call,” Pichai said, pointing to AI’s role in optimizing back-office functions.
He noted that customer service teams have seen major improvements through AI, which has helped enhance user experience while boosting internal efficiency. These innovations, Pichai added, are also being extended to clients through Google Cloud, enabling other companies to leverage the same AI-first tools.
Organizational Restructuring and Strategic Focus on AI
Over the past two years, Alphabet has been undergoing a strategic overhaul to compete aggressively in the ongoing AI arms race against rivals like OpenAI, Microsoft, Meta, and newer entrants like Perplexity. The company has streamlined its structure, merging research, machine-learning infrastructure, developer teams, security, and hardware efforts to boost collaboration and innovation.
But this strategic pivot hasn’t come without growing pains. Google has implemented multiple rounds of layoffs, impacting several business units, even as it continues hiring in areas critical to its AI ambitions.
Regulatory Headwinds: The Looming Threat of a Breakup
Even as Google accelerates its AI transformation, it faces intensifying scrutiny from US regulators. In August 2024, a federal judge ruled that the company had violated antitrust laws to preserve its online search dominance — a historic moment that could lead to a potential breakup of the tech giant.
That wasn’t the only legal blow. Just weeks ago, another US court ruled that Google illegally monopolized segments of the online ad-tech market. In response, Google vowed to appeal the decision.
“We disagree with the Court’s decision regarding our publisher tools,” said Lee-Anne Mulholland, Google’s vice president of regulatory affairs. “Publishers have many options and they choose Google because our ad tech tools are simple, affordable and effective.”
The Road Ahead
Despite the legal challenges, Alphabet’s commitment to AI remains unwavering. Its internal transformation reflects a long-term bet that AI will not only enhance productivity but redefine how modern tech businesses operate.
As Google pushes the boundaries of generative AI—while fighting legal fires on multiple fronts—the coming months could shape not just the company’s future, but also set precedents for how AI and antitrust intersect in the era of intelligent machines.
