GOOGLE: AI EATING INTO ADS REVENUE

Google-owner Alphabet lost just over $500bn (£374bn) in value on Thursday after it revealed its own artificial intelligence (AI) summaries were hitting search advertising revenue.

Chief business officer Philipp Schindler said Google's "AI mode", where it answers questions conversationally, was eating into the money it makes from ads which appear next to results to traditional search questions.

Yet, Schindler said he felt "very good about our trajectory" with an AI-focused version of the search engine.

Google's role in answering the world's questions has been challenged by the AI boom, with millions of people using programs such as ChatGPT and Claude instead.

Kim Scott, who formerly led Google's advertising business, told the BBC's Today programme that the company would "rather eat its own lunch than allow someone else to eat their lunch" by having its own AI summaries hit its search revenue.

- Authors: Kali Hays and Mitchell Labiak, BBC

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