Artificial intelligence (AI) will make advancements in search when it can really reason and provide an answer based on compiling and does not have the capability to really identify and separate truths from non-truths. Today the technology takes what’s out there and doesn’t seem to verify the truth based on information across the web.  

David Friedberg, an interviewer from The All-In Podcast, asked Sundar Pichai, CEO of Alphabet and Google, in an interview with All-In Podcast about the unit of economics in Google's business.

Friedberg asked how the number has changed based on the cost of serving a search query vs. the revenue per search query as the company moves more toward an AI interface.

“People were worried about this two years ago,” Pichai said, adding that they thought about the cost of serving the query. “We’ve seen for a given query the cost has fallen dramatically in the [past] 18-month time frame.”

Latency is more of a constraint than the cost per query but the company has made the transition well from traditional to AI-based search and Pichai feels comfortable that all will fall into place. 

He gave the reasons why later in the interview when talking about Google's technology Ironwood, the company's latest Tensor Processing Unit (TPU) specifically designed to support AI inference with "incredible" scale. 

He also said 50% of the company's overall compute power goes to Google Cloud. 

When asked about ad revenue for AI queries, Pichai said the reason why ads work well in search is because when people have intent, they look for the most relevant information, so he doesn’t see any reason why AI won’t do a better job of serving up what users need -- including ads.

Alternative revenue models for Google are proving lucrative and have become a powerful factor as the company undergoes a major period of disruption in its advertising business.

Google One subscription service, which charges consumers for cloud storage and artificial intelligence features, now has more than 150 million subscribers.

The uptick represents a 50% increase since February 2024, when Google One reached 100 million subscriptions almost six years after the service launched.

AI Overviews, a feature in Google Search that uses generative AI (GAI) to provide concise summaries of a topic in search results. 

Google has other AI platforms such as AI Mode, which the company recently integrated into its traditional search engine.

Friedberg-- who is an entrepreneur, angel investor, and former Google employee -- asked Pichai what he thought about when stepping into the role of CEO of Alphabet and Google in 2015.

“The first thing I did was to think about google being AI first,” Pichai said, referring to when he took the position of CEO. “We really think AI will drive the biggest progress in search.”

He called AI an “extraordinary” advancement for search -- one that will give people access to information they did not have before.

The company plans to speak more about AI Mode next week at Google I/O.