Google parent Alphabet announces first-ever dividend of 20 cents per share

(Reuters) – Alphabet announced its first-ever dividend of 20 cents per share on Thursday, returning capital when the Google parent is spending billions of dollars on data centers to catch up with rivals on generative artificial intelligence.

Shares of the rose nearly 13% in trading after the bell.

Alphabet also said it had authorized the repurchase of up to an additional $70 billion of its Class A and Class C shares.

It also beat Wall Street estimates for first-quarter revenue on Thursday, powered by rising demand for its cloud services on the back of increasing adoption of artificial intelligence and steady advertising spending.

Revenue was $80.54 billion for the quarter ended March 31, compared with estimates of $78.59 billion, according to LSEG data.

Meanwhile, Google Cloud revenue grew 28% in the first quarter, boosted by a boom in generative AI tools that rely on cloud services to deliver the technology to customers.

Google’s cloud services are attractive for venture-capital backed startups developing generative AI technologies due to its pricing and ease of integration with other tools, investors and experts have previously said.

(This story has been refiled to fix the spelling of ‘dividend’ in the headline)

(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila)