NEWS · COMPANIES · #2765
Google says AI mode is weighing on search monetization as Q3 revenue misses expectations
Google's stock fell as search revenue grew about 12% in the third quarter, missing ~15% analyst expectations; executives said faster-growing AI-mode queries generate less revenue than traditional search. The company also reported Google Cloud revenue up 103% to $30.7 billion, Gemini reaching one billion users, nearly 32 billion tokens per minute processed by its model APIs, and third-quarter capex of $51.4 billion with plans for significantly higher spending in 2027.
KEY POINTS
- Google's stock fell as search revenue grew about 12% in the third quarter, missing ~15% analyst expectations; executives said faster-growing AI-mode queries generate less revenue than traditional search.
- The company also reported Google Cloud revenue up 103% to $30.7 billion, Gemini reaching one billion users, nearly 32 billion tokens per minute processed by its model APIs, and third-quarter capex of $51.4 billion with plans for significantly higher spending in 2027.
- This matters because rising AI-driven queries are creating a monetization gap that is already affecting search revenue and investor confidence while Google simultaneously ramps costly AI infrastructure and cloud offerings.
WHY IT MATTERS
This matters because rising AI-driven queries are creating a monetization gap that is already affecting search revenue and investor confidence while Google simultaneously ramps costly AI infrastructure and cloud offerings.