Google admits AI search makes less money, but it's fixing that with more ads
Despite a 25 percent year-over-year revenue increase to nearly $128 billion, Alphabet's net income fell by almost $9 billion. The company admitted AI search earns less than organic search, though it plans to increase AI spending next year. While Cloud revenue exceeded expectations at over $30 billion, earnings per share missed analyst projections.
Key points
- AI search is currently less profitable than organic search
- Alphabet's stock price dropped significantly following Q3 results
- Revenue rose 25% to $128 billion, but net income decreased by nearly $9 billion
- Cloud revenue beat expectations, surpassing $30 billion
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