Google is preparing for a significant shift in its advertising strategy as AI chatbots potentially reshape how people find information online. While the company currently makes over $50 billion quarterly from traditional search ads, it’s now expanding AdSense to accommodate conversational AI experiences, signaling a key transition in digital advertising models. This development highlights the ongoing challenge of making generative AI profitable, as tech giants explore monetization strategies to offset the substantial costs of developing and running these advanced systems.
The big picture: Google has begun testing AdSense ads in AI chatbots, partnering with startups like iAsk and Liner, as it adapts its advertising model for a potential future dominated by conversational AI.
Why this matters: The transition to AI-powered search threatens Google’s core advertising business model, which has been the company’s primary revenue generator for decades.
Behind the numbers: Generative AI remains extremely expensive to operate, with major companies spending billions annually on specialized hardware and enormous energy requirements.
What’s next: Google appears to be developing a multi-pronged approach to making AI profitable through both advertising and expanded subscription options.
The bottom line: The era of completely free, ad-free AI chatbots may be coming to an end as companies search for sustainable business models to support these expensive technologies.