The news: In the wake of Google’s impressive earnings report, YouTube is getting more creative AI tools on YouTube Shorts for both creators and advertisers.

YouTube added an image-to-video generative AI (genAI) tool to Shorts, which can turn a photo into a 6-second video, powered by Google’s Veo 2. It also introduced AI-powered tools that resize ads to fit Shorts’ format.

AI advantage: YouTube is betting that AI will supercharge both content creation and ad performance on Shorts.

• By automating tasks like video generation and ad resizing, YouTube lowers the barrier for influencers and marketers to scale output quickly.
• This could also help establish the platform as an all-in-one creative suite, where users can create, edit, and publish AI-enhanced content without leaving the Google/YouTube ecosystem.

Ad spike: YouTube is focusing AI investments on its moneymaker and engagement engine, Shorts. Its success in selling ads on Shorts—YouTube ad revenues hit $9.8 billion in Q2—are a sign that short-form video is not only popular, it’s incredibly profitable.