With AI competitors posing previously unheard-of threats, Alphabet (GOOGL.O) will be eager to reassure investors this week that its own investments in the technology are enabling it to fortify its defenses against competitors in the search and advertising space.
Tens of millions of users have been drawn to the platforms of Google’s competitors, including AI startups like OpenAI and Perplexity. Even as a U.S. court considers dismantling the tech corporation with remedies that would include a forced Chrome sale, they are attempting to challenge Google Chrome’s hegemony with their own browsers.
In order to keep its hold, Alphabet has released tools like AI Overviews, which display summaries created by AI on top of conventional links and attract 1.5 billion people each month, as well as additional Gemini models for enterprise users. Google’s advertising appeal is largely due to its incorporation of AI, which enables advertisers to run more successful campaigns and receive higher returns on their investment.
Google added a to their search in March. In addition to pulling off a coup, Alphabet has secured rival OpenAI as a client for its cloud company. Alphabet is expected to release its second-quarter results on Wednesday.
“AI targeting advantages and increasing ad loads in AI Overviews could drive ad performance above traditional search,” according to analysts from BofA Global Research.
However, the introduction of their own browsers by OpenAI and Perplexity has increased the pressure on Google’s search division, which was already feeling the pinch from AI chatbots removing queries.
