For the first time in over two decades, Google’s iron grip on online search is being seriously challenged.
The company is now racing to adapt to a world where people are just as likely to ask questions to a chatbot as they are to type them into a search bar.
At its developer conference this week, Google made its biggest move yet: the launch of “AI mode,” a new way of searching that gives conversational answers instead of just a list of links.
The goal? Stay ahead of rivals like OpenAI and regain the initiative it fumbled after a series of missteps.
According to the Financial Times, Chief Executive Sundar Pichai called it a “total reimagining of search.”
It’s powered by an upgraded version of Gemini, Google’s large language model, and now sits at the center of Google Search, Chrome, and its apps.
The Business Model Question
But there’s one big question: Can Google make money from this?
“Monetisation of AI in search is all that matters,” said Ben Reitzes, an analyst at Melius Research. “
Search remains the vast majority of Alphabet’s profit… they better move fast before OpenAI figures it out first.”
The pressure is on. Google makes nearly $200 billion a year from search ads. Now, it’s experimenting with a subscription model for its most powerful AI tools.
Those include Mariner, an AI agent that can book trips and complete research, and Veo, a video creation tool.
Prices range from $20 to a whopping $250 a month for ultra access, more than premium tiers from OpenAI and Anthropic.
Google also plans to insert ads directly into AI responses.
These will be labeled as “sponsored” and aim to be hyper-targeted, showing up when users ask for advice or product recommendations.
Trying to Grow, Not Cannibalize
Pichai believes AI won’t shrink Google’s ad empire, but expand it.
“AI mode is giving you context, expanding your interest, your curiosity,” he said. “You will later research more. When you go to those places, you have a much better intent. Those are much higher quality referrals.”
Still, there’s a lot at stake. Google is under pressure from investors, regulators and fast-moving rivals.
Its stock has underperformed compared to Microsoft and Meta, and there are fears that AI-powered search could cannibalize the very business it’s trying to protect.
Rivals Closing In
Startups like Perplexity, which has grown to 30 million users in just two years, are also gaining traction, according to the Financial Times.
Its CEO, Aravind Srinivas, told the Financial Times that Google’s new AI mode is a “carbon copy” of his own product.
Yet he admits: “Google is one of the world’s greatest businesses and a massive monopoly, [but] it is also very vulnerable because the business is decided around one front end: search.”
Bumps in the Rollout
Meanwhile, Google is trying to prove it can deliver AI that actually works, according to the Financial Times.
Last year’s rollout of “AI Overviews” was mocked for giving bizarre and inaccurate answers.
The company says the new AI mode avoids those errors and is much more polished.
But bugs remain. A new AI shopping feature mistakenly added breasts to photos of men, including Vice President JD Vance, after launch.
These kinds of misfires underline just how tricky this transition could be.
Big Bets on AI Innovation
Despite the risks, Google is betting big. It unveiled a flood of new tools and apps this week, including Project Astra, a futuristic AI assistant that responds to real-time voice and visual input, and “try it on” shopping tech that lets users see how clothes would look on them.
Inside Google, there’s a sense of frustration that the public doesn’t appreciate how much the company has contributed to AI’s evolution.
“We’ve done more than any other company in the world to advance the field,” said a DeepMind executive.
“People should be very thankful — and they are not — for all we have done.”
The Clock Is Ticking
For now, Google is reengineering search to survive the AI shift.
But unless it figures out how to make real money from it, all the innovation in the world won’t be enough.