Big tech firms have poured an infinite amount of money into artificial intelligence development and rolled out tools without any consideration as to whether consumers actually want them or not, all based on the theory that eventually they’ll figure out how to turn a profit. Instead, early returns seem to suggest they’ve simply figured out a way to eat their own profits without an obvious way to replace that revenue stream.

That is at least the case for Google, which, on a Wednesday earnings call, revealed that its “AI Mode” has cut into its traditional search and advertising business. Philipp Schindler, chief business officer at Google, said that the AI-generated responses that Google now overwhelmingly serves to users whenever they search for anything have made it more difficult for Google to monetize results, cutting into its usually extremely profitable advertising business and contributing to the company missing its revenue projections in its latest earnings call.

To be clear, Google’s search advertising business remains a massive moneymaker. It generated $63.4 billion in the third quarter of 2026, up 12% year over year. But that still fell roughly $1.6 billion short of Wall Street’s expectations, with analysts forecasting roughly 15% growth.

It fell well short of that, by stock market standards, and now it’s taking a hit for it. Per Bloomberg , the company’s share price tumbled as much as 13% on Thursday, a day after releasing its quarterly earnings report, and lost more than $500 billion from its market value—the largest ever single-day loss that the search giant has ever experienced.

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