Google is reportedly considering charging users for access to its AI-powered search tools due to the high costs associated with running top-end large language models. The company generates more than half its total revenue from search, almost five times its next most valuable sector. However, generative AI changes the equation. Running a top-end large language model costs serious amounts of money, with just 10% of the cash invested in AI going to training models, while the rest funds their continued operation.
The nature of generative AI is also antithetical to the sort of advertising that is Google’s bread and butter. A classic Google search is a list of links, each to a page the company thinks will answer your query. But an AI answer is different. The best ones won’t link out at all, instead summarising all the information from across the web into one new article, generated on the fly just for you. This could potentially lead to a decline in user clicks on website links, resulting in fewer ad impressions and potentially jeopardizing Google’s primary revenue stream.
If Google does decide to charge for AI, competitors such as Perplexity, Anthropic, and OpenAI, which offer free access to simple models with a paid-for tier for more powerful AI tools, will no longer be undercut by the biggest search engine on the planet.
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