Google (GOOGL, Financial) announced a significant upgrade to its search engine at the Google I/O 2025 Developer Conference, introducing the new "AI Mode." This feature allows users to receive direct answers in a conversational interface, replacing traditional link lists, aiming to enhance search efficiency and user experience.
Alphabet CEO Sundar Pichai described AI Mode as a "complete reimagining" of search, boasting advanced reasoning and understanding capabilities. AI tools like OpenAI's ChatGPT pose a direct threat to Google's conventional search business by providing integrated information, reducing the need for multiple webpage clicks. The shift in user habits may impact Google's advertising revenue.
In response, Google is enhancing its generative AI model, Gemini, integrating it into various products. Following the introduction of "AI Overviews," which now serves 1.5 billion users monthly, AI Mode offers a more interactive search experience. In the future, Google plans to add virtual try-on features to AI Mode for online shopping.
Amidst pressure from competing AI advances and a U.S. antitrust lawsuit, Google continues to face challenges. Despite the rise of competitors like ChatGPT, Google remains committed to negotiating a deal with Apple to enable Siri to utilize Gemini for responses.
