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Google Loses $500bn Market Value As AI Rivals Gain Ground
Alphabet shed $500bn of market value on October 29 following Google's disappointing quarterly earnings and slower ad growth.
Key points
- Alphabet shed $500bn of market value on October 29 following disappointing quarterly earnings.
- Google's ad revenue growth slowed to 11% year on year, the slowest pace in five quarters.
- Meta's AI-powered advertising tools drive a bigger share of its business than Google's.
Why it matters. The decline in Google's ad revenue growth and the rise of AI rivals like Meta threaten to shift the global advertising market landscape away from search-based models.
On October 29, Alphabet shed $500bn of market value after Google reported its slowest ad growth in five quarters. Google's 'AI Mode' in search produced lower monetisation than traditional results, while Meta's AI tools drive a bigger share of its business. Investors fear Meta may overtake Google as the world's biggest ad revenue generator by the end of 2026.
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Google Loses $500bn Market Value As AI Rivals Gain Ground
As its search engine sputters, rivals gain ground. Soon after ChatGPT first captured the world's attention four years ago, some investors began to fret that clever chatbots would upend one of the most lucrative businesses to have emerged in decades: Google search. On October 29th, however, the fears returned with a vengeance, as Alphabet, Google's parent company, shed $500bn of market value, 12% of its total market cap. This significant loss reflects the growing competitive pressure from AI-driven alternatives.