Shares of Alphabet (GOOGL +1.71%) (GOOG +2.00%) turned higher Thursday, gaining as much as 2.9%. As of 2:37 p.m. ET, the stock was still up 1.8%.
The catalyst that sent the tech giant higher was the settlement of a patent infringement lawsuit.
NASDAQ: GOOGL
Key Data Points
An AI chip kerfuffle
On Wednesday, Google reached a settlement to end a $1.67 billion patent infringement lawsuit brought by Singular Computing. Singular founder Joseph Bates claimed in court filings that Google had misappropriated innovations he developed, integrating that technology into its artificial intelligence (AI) processors back in 2017. Google developed Tensor Processing Units (TPUs), which were specifically designed to accelerate machine learning and AI workloads and make the process more efficient.
Google's attorneys maintained the company's innocence, noting that its scientists and engineers had never met with any of Singular's staff and had developed the technology independently. The company said that its solution was "fundamentally different" from that laid out in Singular's patents. Google integrated the technology into the TPUs that support a number of its flagship offerings, including Google Search, Gmail, and Google Translate, among others.
Google spokesperson Jose Castaneda insisted it had not violated Singular's patents and was "pleased to have resolved this matter."
Much ado about nothing?
It's important to put the amount at stake in context. Alphabet closed out the third quarter with cash and marketable securities of nearly $120 billion, after generating nearly $23 billion from free cash flow during the quarter. It isn't as if the $1.67 billion would break the bank for the Google parent.
That said, the company was probably eager to put this lawsuit behind it. AI is a growth industry that went viral last year after advancements in generative AI captivated the tech world. Alphabet was quick to join the fray, introducing a host of AI models for its cloud computing customers.
Furthermore, whatever the amount the company settled for was likely far less than the $1.67 billion amount of the lawsuit. Now Alphabet can get back to business.
