Google Search has traditionally been free to use. Photo by Dilara Irem Sancar/Anadolu via Getty Images.
Key Takeaways
- Google is considering charging for its new AI search product.
- The development comes as the firm is wrestling with how to respond to the impact AI could have on its traditional business model.
- Alphabet stock immediately spiked on the news before settling back to its previous price range.
For nearly a quarter of a century, a free-to-use search engine has formed the central pillar of Alphabet’s now sprawling digital business empire.
But now, for the first time, the company is reportedly considering asking users to pay for its latest planned search product.
Google Mulls Charging for AI Search
According to company insiders cited by the Financial Times, Google is considering adding new AI-powered search options to its paid-for subscription services.
If it goes ahead with the plans, it would mark the first time Google has charged users for web search services, which have traditionally generated revenue through advertising rather than subscription fees. However, executives have not yet made a final decision, the report notes.
Google has been testing a beta version of “Search Generative Experience” (SGE) since last May but has been slow to integrate foundation models into its primary Search product.
Combining the features of traditional search engines and modern chatbots, SGE provides detailed answers to questions as well as links to additional resources.
How AI Threatens Alphabet’s Business Model
While Google Deepmind remains one of the biggest players in Artificial Intelligence, Alphabet’s primary business model is threatened by the rise of AI agents.
In a world where chatbots can increasingly answer questions directly without the need to filter through search engine results pages, platforms like Google Search are no longer as indispensable as they once were.
Any major shift in the way people find information online could pose problems for Google’s advertising revenues. The proposal to charge fees for its new AI search product could be viewed as a response the the emerging threat of changing search habits
Alphabet Stock Responds to AI Search News
Although Alphabet stock spiked in the immediate wake of the Times’ article being published, it soon settled back into its earlier price range.
Overall, the stock price is up this week following the news that Alphabet settled a major lawsuit relating to Chrome’s incognito mode.
So far, market analysts are split on how well-positioned Alphabet is to remain dominant in an increasingly AI-centric digital services market.
It is well-known that OpenAI’s ChatGPT has significantly more users that Google’s equivalent foundation model – Gemini.
It is still too early to tell who will come out on top in the AI race and what Google’s role will be in the emerging search paradigm.
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