Is AI killing Google search? It might be doing the opposite
Google's ubiquitous search tool has proven surprisingly resilient to competition from the likes of OpenAI, which is hoping people will skip the search box and ask its chatbot for answers instead.
One of Google's lines of defense has been its 'AI Overview" tool, whereby users can see answers generated by its Gemini AI model hovering above their traditional search results. Alphabet Chief Executive Sundar Pichai said Wednesday that this tool now has over 2 billion monthly users, up from 1.5 billion users in its last quarterly update. Google is also rolling out an 'AI Mode" that competes more directly with chatbots.
'We see AI powering an expansion in how people are searching for and accessing information," Pichai said in a call with analysts, adding that AI features 'cause users to search more as they learn that Search can meet more of their needs."
Independent analyses suggest Google's AI search strategy is indeed having an impact. Search impressions—the number of advertiser links that show up in searches, even if they aren't clicked—grew by 49% in the year since the overviews were launched, according to a May report from BrightEdge, a search-engine-optimization firm.
Those trends bode well for a search advertising business that accounts for more than half of Alphabet's overall revenue. The company said Wednesday that search revenue rose 12% from a year earlier in the second quarter to $54.2 billion, a record. Analysts surveyed by FactSet had expected $52.9 billion. The company's shares rose about 3% in after-hours trading.
This outperformance underlines Alphabet's continued ability to monetize its search traffic. It has also helped that the advertising market has been relatively healthy in the quarter, despite some hiccups from tariffs and an uncertain macroeconomic outlook that had clouded the picture in April. Evercore ISI analysts said in a note this month that market checks showed ad budgets rising year-over-year in the quarter after a wobbly start.
The real test of Google's search-engine resilience still lies in the future. One issue is that while AI overviews are boosting how many links users see, industry metrics show people aren't actually clicking on revenue-generating links as much. When AI overviews give people the information they seek, they don't need to.
That is a puzzle Google will have to solve to keep itself on top. If it can show advertisers that they are getting a sufficient return on their spending through high-quality AI answers, the overview tool may lead to more spending and more revenue for Google.
The other big unknown is how new AI-infused web browsers from the startup Perplexity and reportedly from OpenAI might change how people get information. Those challenges are in their infancy, and could make inroads against Google's Chrome browser. The impact to Google's revenue, if there is one, would only show up at a later stage, when the new entrants start building a substantial ad business tied to their software.
What is clear is that Google has many tools with which to respond to the challenges.
The company can modify Chrome to better compete against new entrants. It can imbue Gemini into other products. It can come up with software that others can't easily replicate, such as new AI-driven results in its 'Circle to Search" feature on Android phones, where users can circle anything on their screens and get feedback about it.
Google also has a record of making defensive moves when it needs to. When search traffic was poised to shift to mobile phones two decades ago, Google acquired Android and developed its mobile-phone operating system. As Apple's iPhones became ubiquitous, Google started paying Apple billions of dollars to make its search engine the default in the company's Safari browser. And when the AI boom kicked off nearly three years ago, Microsoft's early AI push raised concern about Bing taking market-share from Google. That led Google to splash out on AI computing, and Microsoft didn't make much of a dent.
Google's success has helped it build a cash pile it can deploy to keep up the defense. On Wednesday, Pichai said he was upping the company's 2025 capital spending to $85 billion from an earlier plan of $75 billion. Chief Financial Officer Anat Ashkenazi said the company would spend even more next year.
There is no doubt that Google faces more serious threats to its search dominance than it has in a long time, not to mention unprecedented antitrust scrutiny across the globe.But the company is chronically undervalued compared with its peers. Based on its performance so far in the AI age, it looks likely to come out far less scathed than many skeptics believe.
Write to Asa Fitch at asa.fitch@wsj.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
News18
27 minutes ago
- News18
India Set to Add 2.3 Million AI Jobs by 2027, Redefining Global Talent Flows
VMPLLas Vegas (Nevada) [US], August 14: At Ai4 2025, North America's largest artificial intelligence (AI) industry event, Sanjay Puri, Founder of RegulatingAI and Chairman of Knowledge Networks Group, delivered a rallying call for inclusive global AI talent development. In his solo keynote, 'Democratizing AI Talent: Bridging Policy, Innovation, and Equity," Puri outlined how India's rapid AI transformation, powered by a INR 10,300 crore IndiaAI Mission, 18,693 GPUs, and a 16% share of the global AI talent pool, is positioning the nation to lead Global South in supplying nearly half the world's STEM graduates by 2030, redefining the Global South from 'talent consumer" to 'talent exporter."AI talent pipelines today remain concentrated in the Global North, shaped by systems that favour English-speaking, resource-rich contexts. However, that landscape is beginning to shift. India has already overtaken the United States as the largest user base for ChatGPT, accounting for 13.5% of global monthly active users in June. It also ranks as the world's third-largest user of DeepSeek, signalling a surge in digital literacy and appetite for AI tools across the Global South. At the recent launch of OpenAI's latest model, GPT-5, CEO Sam Altman underscored this shift, noting that India is now the company's second-largest market after the United States, and could soon take the top his solo talk at the AI summit, Sanjay Puri said, 'By 2030, India and the Global South will not just consume AI talent, but export it at scale. This can only be achieving with the democratization of AI talent and dismantling the invisible walls of the industry, building South-North skill corridors, and closing the rural-urban gap at home. Mutual recognition of credentials and open policy sandboxes can empower coders from localized AI skilling hubs in Tier 2 and 3 Indian cities to launch world-class models on equal footing with Silicon Valley." His keynote came at a moment of global concern over the risks of technological exclusion and the centralization of AI power. While private companies dominate AI development in the West, Sanjay emphasized India's alternative model centres on policy, public sector innovation, and community-scale application. Government-backed initiatives such as the India AI Mission, Anuvadini, AI Kosh, and Bhashini are building a comprehensive ecosystem to foster AI innovation, strengthening regional language capabilities, collecting inclusive datasets, and collaborating with startups to build India-specific AI solutions. 'India's AI story isn't about catching up. It is about setting the pace for the world. From frugal-AI health diagnostics that bring life-saving care to remote villages, to AI tutors reaching 300 million students, we are proving that equitable talent pipelines unlock innovations the Global North would not dream of," he Puri sees India's approach as a model for nations throughout Africa, Latin America, and Southeast Asia, where AI must grow alongside education, digital access, and local participation. It is not about adapting to existing AI trends, but actively shaping them to serve developmental priorities such as healthcare access, quality education, rural connectivity, and financial Sanjay PuriSanjay Puri is a globally recognised speaker on AI policy and regulation, Founder of Knowledge Networks Group, and host of the CAIO and Regulating AI podcasts, where he drives conversations on AI's societal impact, ethics, and innovation. An advocate for the creation of a Chief AI Officer (CAIO) role in the C-suite, he advises organizations on using AI responsibly for sustainable growth. Sanjay specializes in thought-provoking discussions on: AI Policy & Regulations: Advancing frameworks to guide ethical AI adoption worldwide, AI Leadership & Strategy: Advocating the CAIO role to unlock AI's full potential in businesses, Driving Ethical AI in the Global South: Addressing challenges and opportunities in underrepresented Ai4 2025Established in 2018, Ai4 has grown into the epicenter of the global AI ecosystem and the industry's premier annual gathering. The conference showcases cutting-edge applications, from AI agents to generative AI, alongside the best practices shaping the future of artificial intelligence. With dedicated content tracks and unparalleled networking, Ai4 connects leaders from every sector of the AI landscape to advance responsible human-machine collaboration.(ADVERTORIAL DISCLAIMER: The above press release has been provided by VMPL. ANI will not be responsible in any way for the content of the same)
Time of India
41 minutes ago
- Time of India
Google pledges $9 billion to expand AI, cloud infrastructure in Oklahoma
Alphabet's Google said on Wednesday it will spend an additional $9 billion in Oklahoma over the next two years to expand cloud and artificial intelligence infrastructure. The company will build a new data center campus in Stillwater and expand its Pryor facility to bolster U.S. AI and cloud capacity, alongside education and workforce programs. Intensifying competition among Big Tech companies has prompted them to spend heavily on building new data center sites and skills development amid booming demand for AI services. Google said that a portion of the spending is included in the capex plan for 2025 it previously announced, while the remainder is earmarked for the future. Last month, Alphabet raised its annual capital spending plans to about $85 billion from $75 billion previously and signaled more to come next year. Alphabet and its peers have defended their heavy AI spending as essential to fueling growth and improving products amid high competition from Chinese rivals and investor frustration over slower-than-expected returns. Google also committed $1 billion to AI education and training for U.S. higher education institutions and nonprofits last week. Rivals including OpenAI, Anthropic and Amazon have made similar pushes around AI in education. More than 100 universities have signed on to Google's initiative so far, including some of the nation's largest public university systems such as Texas A&M and the University of North Carolina. Meanwhile, U.S. President Donald Trump's onshoring push has also accelerated AI infrastructure investments by companies such as Micron, Nvidia and CoreWeave. Apple also announced last week that it plans to spend $600 billion in the U.S. over the next four years.
Mint
an hour ago
- Mint
Google Photos Remix transforms images into anime, sketch, 3D and comic styles: How the feature works
Tech giant Google has provided further details about its forthcoming Remix feature in the Photos app, which uses generative artificial intelligence (AI) to convert ordinary images into artistic creations. Initially announced in July, the feature is expected to become available to Android and iOS users in the United States in the coming weeks. The Remix function allows users to choose a photo from their gallery and apply a range of artistic styles, including 3D animation, anime, comic book, and sketch. Once processed, these transformed images can be shared in the same manner as any regular photograph. The tool is integrated within the Google Photos app but functions separately from the app's default photo editor. To use the feature, users need to open the Google Photos app and tap the 'Create' button at the top-right corner of the screen, followed by selecting 'Remix'. After tapping 'Try now', an artistic style can be chosen before selecting the photo to be edited. The 'Generate' button applies the chosen style, producing a reimagined version of the image. Users can then save the edited photo or share it directly via the app. Additional options include 'Regenerate', which allows users to create varied results using the same style, and 'Change photo', which permits editing a different image without exiting the feature. Google has emphasised that the feature is experimental, and the output may not always closely match the original photograph. For best results, it is recommended that users select well-lit, focused, or front-facing portrait photos featuring one or a few subjects. The Remix feature is introduced alongside Google's photo-to-video tool, powered by Veo 2, marking an extension of the app's AI-driven capabilities and providing users with more ways to experiment creatively with their images.
