AI search monetization gap

Google reports that queries handled in its LLM‑powered 'AI Mode' generate less ad revenue than traditional search even as query volume grows, and the company has turned on ads globally to try to close the gap. At the same time Alphabet is spending tens of billions on servers and datacenters, squeezing profitability and triggering a market reaction. — If true across the industry, AI‑first interfaces could undercut the dominant ad business model, forcing new pricing, regulation, and national industrial strategies around compute and data‑center siting.