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Google shoots itself in the foot?

Google's search engine has changed.

There was a time when you simply typed in your search query and Google came back with a list of links to relevant websites.

Then they decided to throw some ads in, to generate revenues.

Then they decided that the ads should come before the actual links to useful websites.

This seemed to work pretty well and search-related ad revenues became quite a chunk of the company's income, contributing nicely to its profits.

However, it's all different today.

Perhaps proving that sometimes it's little more than a solution in search of a problem, AI was thrown into the search results formula.

Now, your average Google search returns an AI summary at the top of the page.

Lazy people can use this summary without validating any of its claims and without visiting a single one of the website-links that follow, a little further down the page.

Let's be honest, this isn't a bad use of AI at all. Instead of laboriously trawling through perhaps dozens of pages linked in the regular results, the AI summary, more often than not, does that job for you.

At the very least, you get a condensed overview of what those linked pages might contain and this information may be all you need to satisfy your quest for knowledge or to answer a question.

"Look at us, look how clever we are, we've given you AI search results" is undoubtedly what Google is crowing, everytime someone uses their web-search system.

However, there's only one problem and it's Google's problem, not ours.

According to this story, Google has shot itself in the foot somewhat by creating these AI search-result summaries.

According to the story "Shares in Google’s parent company Alphabet dived by almost ten percent on Wednesday, after the web giant admitted AI-powered searches earn it less money than it earns by serving ads with its old-school search engine".

Hahaha... sorry, I can't contain my schadenfreude.

It seems that not only are they dipping out on ad revenues, simply because people have learned that there's no longer a need to click links on the results page but they're also having to foot a huge bill for all the tokens this summary consumes during its production. In fact it seems that not even Google itself has enough AI capacity to service the demand so it's contracting some of this out to third-parties.

This probably explains why Google is paying Musk's xAI company almost a billion dollars a month for the use of some of its AI infrastructure.

Owch, that has to hurt!

In related news from across the ditch, Aussie AI company Firmus is in a bit of strife after pulling its plans to launch an IPO. Apparently the investment community is increasingly getting cold feet over AI stocks and this meant that the IPO would likely have tanked.

The company is facing US$550 million in debt which falls due at the end of the year and right now, it has no funding in place to cover that.

The cracks in the AI bubble are becoming impossible to ignore. Watch this space.

Carpe Diem folks!

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