The owner of Google reported a surge in profits last night as it was caught in the crossfire of a trade war between the US and China.
Alphabet, the parent company of the search engine, posted a profit of £80billion for 2024, up from £59billion the previous year. Sales, meanwhile, jumped to £280billion from £246billion in 2023.
But the shares – which hit a record high before the figures were published – fell more than 7 per cent in after-hours trading as sales of £77billion in the final three months of the year fell short of expectations.
However, this was still up from £69.1billion in the same period for 2023.
The lower-than-expected sales were despite boss Sundar Pichai claiming the fourth quarter had been ‘strong’, driven by what he said was the company’s ‘leadership in AI’.
The results came as Google found itself in the crosshairs of Chinese authorities as they retaliated against Trump’s tariffs. Moments after the US announced a 10 per cent tax on Chinese goods, Beijing responded by opening a probe into the search engine firm.
Google’s parent company Alphabet posted a profit of £80bn for 2024, up from £59bn the previous year. Sales, meanwhile, jumped to £280bn from £246bn in 2023
Chinese regulators said Google was being investigated on suspicion of breaking anti-trust laws but did not provide further details.
While Google’s search engine is banned in China, the company still maintains offices in the country mainly focused on sales and engineering for its advertising arm, which allows Chinese companies to promote their products abroad.
It is thought any probe could focus on Google’s smartphone operating system Android, as a potential bargaining chip in China’s trade war with the US.
The system is used by major Chinese phone makers such as Oppo and Xiaomi.
Beijing also said it would add PVH Group, the owner of brands such as Calvin Klein and Tommy Hilfiger, and Californian biotech firm Illumina to its ‘unreliable entity’ list.
This means they could be subject to greater restrictions on their dealings in China.
The probe into Google follows a similar investigation announced last month into Nvidia, whose computer chips have been relied on heavily to power the development of AI.
Chinese regulators said they are investigating Nvidia over claims it violated commitments made over its 2019 takeover of Israeli computing firm Mellanox Technologies.
Another probe is also being considered against US computing firm Intel.
China is Nvidia’s second largest market after the US, accounting for around 13 per cent of its sales for the first nine months of last year.
The country’s finance ministry also announced 15 per cent tariffs on coal and liquefied natural gas as well as 10 per cent on crude oil, farm equipment, large vehicles and pickup trucks from the US.
The growing trade war with China comes after Trump struck last-minute deals with Canada’s prime minister and Mexico’s president to delay the imposition of 25 per cent tariffs on products from both nations for 30 days.
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