Woe is Google. After it starved out publishers with its AI features, it’s now getting a taste of its own medicine.
Shares of its parent company Alphabet took an over 11 percent nosedive on Wednesday, after it disclosed that its AI search features are raking in less money than its traditional search ad model. The steep correction wiped out more than $500 billion in market value.
In its Q3 report, Google reported a quarterly revenue of $127.6 billion, a 25 percent year over year increase. But it’s also spending more, with capital expenditures more than doubling from last year to $51.4 billion, largely thanks to its massive AI investments.
Meanwhile, the growth of its revenue from search seems to be tapering off. It reported a 12 percent year-over-year increase to $63.3 billion, which is less than the 14.5 percent growth it reported in the same period last year.
