Google says AI search earns less than web search as growth slows
Original title: Google admits AI search makes less money, but it's fixing that with more ads
Alphabet's Q3 EPS of $2.12 missed a $3.02 consensus, and shares fell almost 12 percent after the report.
Alphabet reported almost $128 billion in Q3 2026 revenue and more than $26 billion in net income, yet net income was nearly $9 billion lower year over year and earnings missed analyst expectations. Search volume grew 12 percent, slower than 17 percent in Q2 and 19 percent in Q1, and search revenue was flat. Chief Business Officer Philipp Schindler said each AI Mode query earns less than a comparable web search because it shows fewer, cheaper ads. Google Cloud beat estimates at more than $30 billion, while Alphabet still expects to spend more on AI next year.
Unconfirmed: The article says slower search growth is likely driven by chatbot use, which is not confirmed by Google.
- Revenue rose 25 percent year over year, but analysts had expected more.
- Search growth slowed from 19 percent in Q1 to 12 percent in Q3.
- Schindler said AI Mode queries carry fewer ads that cost less to run.
- Google Cloud revenue topped $30 billion, about $1 billion above estimates.
- The stock was down almost 12 percent as of press time.
- Vendors
- Products
- AI ModeGoogle Cloud
- Organizations
- Alphabet
- AI models
- Gemini
From the original article
2 min read at arstechnica.com
Google's negative cash flow balloons to -$9. 06 billion, and stock price tumbles following Q3 earnings.
By Ryan Whitwam · arstechnica.com
A short excerpt; the article and its images belong to the publisher. Summary, key facts and assessment above are AI-written from the article and can be wrong.