Google hasn’t figured out how to make AI pay like its search engine

Search queries are growing at their fastest rate in five years, Google parent Alphabet said in its earnings report last week. However, Google’s Search revenue growth slowed to 12 percent year over year in the third quarter, down from roughly 17 percent in the previous quarter. Meanwhile, growth in paid clicks — clicks on ads that generate revenue for Google — slowed from 13 percent to 8 percent.

That’s still substantial growth, but not the direction investors were hoping for from a company planning to spend about $200 billion this year on infrastructure, largely to support AI. Alphabet shares havefallen about 14 percent since it reported earnings last week, as investors question the costs and returns of the company’s AI ambitions.

“This is the first major disruption that Google is facing to its core business in decades.”

Chief Business Officer Philipp Schindler said currency effects were the biggest driver...

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