Google’s parent company Alphabet smashed forecasts with its quarterly revenue announcement.

Alphabet posted a 21.3 per cent increase in second-quarter revenue, $21.5billion compared with from $17.73bn a year earlier.

That was almost a billion dollars more than most experts predicted.

The performance was driven by mobile advertising sales and video content, showing that the tech giant – which started out with its desktop search engine – is successfully navigating the transition to mobile.

“There’s an amazing atmosphere at Google,” said Google Inc CEO Sundar Pichai. “Mobile is the engine that drives us.”

CFO Ruth Porat said the results "reflect the successful investments we've made over many years in rapidly expanding areas such as mobile and video".

Ad revenue increased 19.5 per cent to $19.14bn on the back of a 29 per cent rise in paid clicks.

Sundar Pichai

Pichai indicated that Google, which acquired British artificial intelligence start-up DeepMind in 2014, sees machine learning as critical to the future of the company.

“Through investment in AI, we are investing in our future,” he said.

The AI research lab is teaming up with the NHS on two projects in London while it could cut the world’s global greenhouse-gas emissions significantly by implementing its machine learning in Google’s data centres.

Alphabet’s Other Bets division saw a 150 per cent increase in revenue to $185m but operating losses rose to $859m from $660m a year earlier.

That arm of the company includes driverless cars, Google Fiber broadband and Internet of Things firm Nest.

Porat said the company has racked up more than 1.6m miles testing driverless cars.

"We're focused on fully autonomous cars because in early testing we saw the risk of depending on drivers to remain engaged once you give them the option to switch off,” she said.

“So we've invested a lot there. We're testing extensively based on this approach."

Electric car manufacturer Tesla has come under fire after its Autopilot mode was engaged in two recent crashes, including one which killed a man.

Tesla said drivers must always be alert and prepared to step in at a moment’s notice.