Has AI already begun to harm Google's core search business? This is the biggest unresolved question left after the company released its third-quarter financial report.

Google reported on Wednesday that its year-over-year search query growth rate reached its highest level in the past five years. At the same time, search revenue increased by 12% compared to the same period last year.

In short, Google's investment in AI seems to have brought about unprecedented search volumes, but revenue growth has not kept up at the same pace.

For investors who have long been concerned that the craze around generative AI may directly threaten Google's search business, this is undoubtedly a major warning sign.

During the financial report conference call on Wednesday, when asked about this gap, Google's Chief Commercial Officer Philipp Schindler attributed the cause to various factors, including unfavorable foreign exchange conditions. The company expects that this factor will continue to affect its search business in the next quarter. He also stated that the increase in the number of AI related searches does not match the way the company makes money from these searches.

He said, "It is worth noting that the strong growth in AI Mode queries has had an impact, as we see lower levels of monetization in AI Mode."

A concerning gap facing Google

Since the rise of ChatGPT at the end of 2022, Google's investors have been concerned whether the generative AI craze could pose a existential threat to Google's business.

Not only have OpenAI and other competitors launched chatbots that provide users with an alternative way of searching, but they have also forced Google to respond by changing its core search advertising business.

Google CEO Sundar Pichai hinted during the earnings call on Wednesday that despite the company's adjustments to its search algorithms, revenue growth has still lagged behind these changes.

He said, "Just as we transitioned to mobile devices over a decade ago, our focus is on creating the best search user experience, and then we proceed with monetization."

Senior investor Gene Munster views Google's search business not meeting expectations on Wednesday as a signal that investors may need to be vigilant.

He wrote on X: "Since March 2025, the search business has been exceeding expectations. If this is a clean mistake without any one-off factors, it is very likely to reignite market concerns about generative AI and the increasingly personalized robots encroaching on growth."

Investors will continue to wait for Google to prove that its monetization efforts will accelerate, and that in the AI era, this cash cow of search will still be able to maintain its strength.

Bernstein Research Technology Analyst Mark Shmulik wrote in a report for investors: 'Are more monetizable search queries being affected by the AI interface and proxies?'