Google Expands AI-Mode Ads Amid Search Revenue Slowdown

Alphabet reported third-quarter 2026 results on October 29, 2026, with total revenue of $127.6 billion, up 25% YoY, and Google Search revenue up 12% YoY to $63.3 billion. Search ad growth slowed from 19% in Q1 to 12% in Q3, triggering an 8%-10% share dip in after-hours trading. Google responded by rolling out ads in its AI-Mode search experience worldwide and launching “multiturn” ads in the United States.

Google Search revenue rises 12% to $63.3B in Q3 2026 despite AI Mode monetization lag

AI-Mode is Google’s Gemini-powered conversational layer that handles longer, multimodal queries—about three times the length of traditional searches—and accepts voice, image, and document inputs. The company spent $51.4 billion on capex this quarter and plans $195-$205 billion in 2027. Gemini models produced 1.5 billion campaign assets, a seven-fold year-over-year rise.

Google Expands AI Search Ads Globally and Adds Gmail-Powered Autofill to Chrome as Search Growth Slows

• Revenue: $127.6 billion total; $96.3 billion Google Services; $30.7 billion Google Cloud (103% YoY).

Adweek

• Advertising: $82 billion total ad revenue (? $63.3 billion Search, $11.2 billion YouTube, $7.5 billion Network).

Google Search ad revenue grows 12% to $63.3 billion despite lower AI Mode monetisation

• Search Growth: 12% YoY; query growth fastest in five years; visual searches > 50 billion per month.

Google Search ad revenue grows 12% to $63.3 billion despite lower AI Mode monetisation

• AI-Mode Usage: Queries three times longer; one-in-five involve voice, images, or documents.

Google Rolls Out AI Mode Ads in 10 Countries, Multiturn Ads in U.S.

• Ad Performance: Click-through rates for sponsored listings in AI-Mode comparable to organic listings; Gemini-generated assets at 1.5 billion.

Google Rolls Out AI Mode Ads in 10 Countries, Multiturn Ads in U.S.

• Geographic Expansion: Ads now in Australia, Canada, India, Kenya, Malaysia, New Zealand, Nigeria, Pakistan, the Philippines, Singapore (announced Oct 28 2026); Brazil, Mexico, UK slated for Q4 2026.

Ads in Google Search’s AI Mode Are Coming to More Markets

• Sundar Pichai, CEO, noted the surge in query volume and that AI-Mode queries are “three times longer” with visual searches topping 50 billion per month.

TechCrunch

• Philipp Schindler, CBO, said AI-Mode’s rapid growth has “lower monetization” than traditional Search, prompting ad expansion to capture “upper-funnel” intent and citing comparable click-through rates.

Google Says Ads In AI Mode Earning Less Than Traditional Search Ads

• Anat Ashkenazi, CFO, linked cash outflow to building AI inventory that will generate revenue as TPU systems are delivered.

AI is squeezing Google’s search growth – and its cash

• Thomas Kurian, Google Cloud CEO, highlighted over 100 customers using Google’s TPU hardware, providing a near-term revenue stream.

AI is squeezing Google’s search growth – and its cash

• Some outlets describe Search revenue growth as 12% YoY, while others call it “flat,” reflecting divergent interpretations of the same data.

Alphabet Shares Fall After Google Says AI Mode Monetization Weighed On Search Growth: 17 outlets compared

• Advertisers’ exact click-through rates in AI-Mode are described as “similar” to organic listings, but the numbers are not disclosed.

Google Rolls Out AI Mode Ads in 10 Countries, Multiturn Ads in U.S.

• “In a market worried about AI cannibalising the franchise, investors need to see search accelerating, not decelerating,” — Dave Wagner, Aptus Capital Advisors

AI is squeezing Google’s search growth – and its cash

• “We continue to accelerate the deployment of Gemini models across our entire ads infrastructure to boost performance,” — Philipp Schindler

CNBC

• “Multiturn ads show up on responses to follow-up user queries as users engage in back and forth conversations with AI Mode.” — Did Google, CEO

Google Expands Ads In AI Mode In More Countries & Multiturn Ads In U.S.

Alphabet will extend AI-Mode advertising to Brazil, Mexico, and the United Kingdom in Q4 2026 and increase capex “significantly” in 2027, according to CFO Ashkenazi. Testing of multiturn ad formats will continue, with impact on search monetisation under review.

Google Search ad revenue grows 12% to $63.3 billion despite lower AI Mode monetisation