Breaking Down the Google AI Buildout
Lance Roberts | Jun 11, 2025 06:51AM ET
On May 20th, Google (NASDAQ:GOOGL) CEO Sundar Pichai updated the public on the company’s progress on its AI development as follows:
We are now processing 480 trillion monthly tokens, a nearly 50X increase in just one. Over 7 million developers are now building with the Gemini API, a 5x growth since last I.O., and our enterprise usage on Vertex AI is up more than 40%.
It sounds impressive, but if you are like us, a lot of that probably went over your head. What is Google’s CEO really saying? Let’s use AI to translate his words into plain English, helping you understand just how quickly Google is advancing its AI processing and developer capabilities. Per Grok:
- “We’re processing 480 trillion monthly tokens, a nearly 50X increase in just one.”
- This means a system (likely related to AI or computing) is handling a massive amount of data—480 trillion “tokens” (think of tokens as units of data, like words or pieces of information in AI processing). Compared to earlier (maybe a year ago), this is 50 times more data than they were handling before. It’s a huge jump!
- “Over 7 million developers are now building with the Gemini API, a 5x growth since last I.O.”
- The “Gemini API” is a tool that programmers (developers) use to create apps or software. Right now, more than 7 million developers are using this tool. Since the last big event (called “I.O.,” likely a tech conference), the number of developers using it has grown five times larger.
- “Our enterprise usage on Vertex (NASDAQ:VRTX) AI is up more than 40%.”
- “Vertex AI” is another tool or platform, likely used by big companies (enterprises). The number of businesses using it has grown by more than 40% compared to before.
Simply put, Google is experiencing exponential growth in AI-related activities, including data processing, AI development, and business usage of AI on its Vertex platform.
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Market Trading Update
Yesterday, we discussed the potential risk of a market rotation following the recent industrial surge. Today, I want to focus on the S&P 500 index, which has had a phenomenal rally from the April lows, rising 20% in just 2 months.
Historically, that is a swift surge, worrying investors that the rally has come too far. Logically, it would make some sense that the rally will likely pause near term to reset buyers and sellers. Still, longer-term, such a rally has historically set a decent precedent for future market returns, as shown.
It is worth noting that previous 20% returns often came after major bear markets like 1974, 2000, and 2008. But, as we stated previously, a look at technical indicators suggested that while the 20% correction in March was swift, investor sentiment dropped to levels not seen since more major market declines.
In other words, while the correction was just a normal, garden-variety decline, investors acted like it was a major bear market crash.
“Whether or not the current market crash is the beginning of a larger corrective cycle, such low readings have, without failure, marked the near-term low of a market correction. While the market has previously continued its corrective process after such low readings, such did not occur without a meaningful reversal rally first..”
With that “meaningful rally” in the books, investors wonder what happens next. While the weekly indicators suggest a continuation of the bull market into the end of the year, short-term readings are now at levels that indicate a consolidation or pause is likely.
With money flows declining, relative strength and momentum overbought, the buy/sell demand imbalance becomes more apparent. While the market is making gains, it has been a daily struggle to make those gains with bouts of selling during the trading day.
While there is no reason to be bearish, we should expect a pullback toward the 200-DMA to work off some short-term technical overbought conditions, bringing buyers into the market. We suggest holding some cash in portfolios to opportunistically buy stocks you want to own on dips. While it may not seem like a dip is forthcoming, such is always the case just before a pullback occurs.
Remain patient and pick your entry points.
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