Google Q3: AI Search Features Drive Record Usage
▼ Summary
– Google’s Q3 earnings showed AI features like AI Mode and AI Overviews are expanding search usage rather than cannibalizing it, with queries growing year over year.
– AI Mode reached over 75 million daily active users globally across 40 languages and drove incremental total query growth for Search in Q3.
– Alphabet reported its first $100 billion quarter with $102.3 billion in revenue, including $56.6 billion from Google Search and $10.26 billion from YouTube ads.
– Google plans to continue investing in AI-led search, including the upcoming Gemini 3 release and raising 2025 capital expenditure guidance to $91–$93 billion.
– The company emphasized that AI experiences drive billions of clicks to websites daily and highlighted growth in commercial queries, supporting continued marketing investment.
Google’s third-quarter earnings reveal a pivotal development: artificial intelligence is fueling record levels of search activity rather than reducing it. During the earnings presentation, CEO Sundar Pichai characterized this period as an “expansionary moment for Search,” emphasizing that Google’s AI-powered tools actively promote web content and generate billions of daily clicks to external websites. He noted that both general and commercial search queries saw year-over-year growth, with acceleration occurring in the third quarter compared to the second, largely due to the influence of AI Overviews and AI Mode.
The performance of AI Mode showed particularly strong momentum. Pichai reported consistent week-over-week growth in the United States, with the volume of queries doubling over the quarter. The feature has been introduced globally in more than 40 languages, attracting over 75 million daily active users. More than 100 enhancements were delivered in Q3 alone, contributing to what Pichai described as “incremental total query growth for Search.” AI Overviews also demonstrated a powerful effect, driving what he called “meaningful query growth,” with the strongest impact observed among younger audiences.
From a financial perspective, Alphabet posted impressive results, achieving its first-ever quarterly revenue exceeding $100 billion. The “Google Search & other” segment brought in $56.6 billion, a significant increase from $49.4 billion during the same period last year. YouTube advertising revenue reached $10.26 billion, with Pichai highlighting that the platform has maintained the top position in U.S. streaming watch time for over two consecutive years, according to Nielsen data. He also pointed out that YouTube Shorts now generates higher revenue per watch hour than traditional in-stream ads in the U.S. market. The quarter’s results were affected by a $3.5 billion fine from the European Commission; excluding this charge, the operating margin stood at 33.9%.
The core message to investors is clear: AI-enhanced search is expanding the overall search ecosystem instead of shrinking it. This provides a solid rationale for Google to integrate AI Mode and AI Overviews into more user interactions. For marketers, this signals a redistribution of traffic within Google’s ecosystem rather than a decline in search activity. Notably absent from the earnings report were specific metrics detailing outbound click share from AI experiences or new reporting tools to monitor them. As a result, marketing teams will need to depend heavily on their own analytics to assess the real impact of these changes. The strong revenue performance, especially growth in commercial queries, suggests that advertising budgets are likely to remain with Google as AI-led sessions capture a larger portion of user engagement.
Looking forward, Google shows no signs of slowing its AI initiatives. Pichai expressed anticipation for the upcoming release of Gemini 3 later this year, which is expected to provide a more advanced model foundation for both AI Mode and AI Overviews. The company also described Chrome as “a browser powered by AI,” promising deeper integrations with Gemini and AI Mode, along with the arrival of “more agentic capabilities” in the near future. To support this ambitious roadmap, Alphabet has increased its 2025 capital expenditure guidance to a range of $91–$93 billion, ensuring continued heavy investment in search infrastructure and innovative features.
(Source: Search Engine Journal)
