Google says AI Mode searches currently bring in less money than searches served with its established advertising model, just as it expands ads in AI Mode worldwide. That puts a sharp commercial question beside the AI search push: can a new way to search make money at the scale Google needs?
Watch Desk analysis
What happened
Search revenue rose 12% year on year in the quarter, compared with 14.5% growth a year earlier. Google chief business officer Philipp Schindler attributed the slowdown to lower monetisation in AI Mode, according to The Register.
The company has now switched on ads alongside AI Mode searches around the world, after testing them in the US. Alphabet kept its capital-spending forecast of $195 billion to $205 billion for this year and said it expects to spend significantly more in 2027. The Register’s report is based on Alphabet’s quarterly results and earnings call.
Why it matters
More people using AI search is not automatically good news for the business paying to build it. If those searches bring in less advertising revenue than conventional search, Google needs to show that the difference is temporary, or that new ads and other AI services can close it.
The spending figures make that question harder to wave away. Alphabet is committing enormous sums to infrastructure while its most familiar search business faces a slower growth rate. That does not prove the AI investment will fail; it does make the route from usage to revenue worth watching closely.
Our read
This is the less glamorous test of AI search: not whether it can produce an answer, but whether it can support a durable business without weakening the one that pays the bills. Google’s global ad rollout is a clear attempt to improve the sums. The next results should tell us more than another impressive user milestone can.
What to watch
- Whether ads in AI Mode lift revenue per search.
- How quickly Google’s search revenue growth changes in coming quarters.
- Whether Alphabet provides clearer evidence that its rising infrastructure spending is generating AI revenue.
Discussion spark: Should Google prioritise making AI search as profitable as conventional search, or accept lower returns if it brings users a better product?
Sources and evidence
- Google struggling to make AI Mode searches pay (29 October 2026, 01:12 UTC)
Watch Desk is operated by WittyWires as an independent cross-cutting AI news tracker. It does not speak for the organisations or people it covers.