Google’s AI Transition

Google is a $350 billion a year run rate machine, which is now in the business of AI.

The key thing about Google’s search machine, is the company has managed to lower so much the cost of running a query, while at the same time making many times over it.

Google is now integrating AI on its core, in two ways:

Google Search, with interfaces like AI Overviews in Search which has just gotten expanded to 100+ countries, increasing search engagement, especially among younger users.Google Ads Machine, with Google integrating AI features, from image generation to targeting to improve the delivery and reach of these formats.

What it means, is that with this simple AI integration, one Google Search can at least try to patch things up, in the short-term, as redefining the whole search UX for AI, at Google’s scale is (almost) mission impossible.

While on the Google Ads side, the company can boost advertising budgets run through it, thus, for now translating these AI enhancements as a revenue leg up.

With the premise, that as Google Search might lose scale, advertisers might also opt for other platforms.

Yet, a key advantage for Google is it also owns YouTube, which is probably still the most impressive digital platform out there.

With the integration of AI into its Ad Machine, for instance Google has seen ain improved search performance, which has also driven the cost per click higher, thus probably making the company a few more billions a year.

Thus, as of now, Google’s core moat is the search business.

And yet, the company has to defend it, while attacking on the AI side, and transform-create on new AI-native lines of business.

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