Google Hints at Future Ad Integration in Gemini AI, Balancing User Experience and Monetization

Would you use Google Gemini if it fills with ads?

You can already see hints of ads in AI overviews in Google Search Google's Gemini AI might not have ads today, but let's be real: the idea that Google is looking to bring advertising to AI assistants is hardly surprising. Google has spent decades fine-tuning the art of turning eyeballs into revenue, and Gemini may be next in line, according to CEO Sundar Pichai. During Alphabet's latest investor call, Pichai gave a not-so-subtle hint that while you can use Gemini for free or pay for a subscription to extra features, advertising will likely come along to boost the company's bottom line in some way. Google Gemini doesn't have banner ads popping up mid-conversation at the moment, but it doesn't take much imagination to picture a time when ads will support the free version of Gemini, and the premium subscription will count its lack of advertisements as one of its perks. It makes sense. AI isn't cheap to run, and Google has already announced plans to spend $75 billion this year to keep up in the AI race. That kind of money doesn't grow on trees; it grows on ad revenue. "On the monetization side, obviously, for now, we are focused on a free tier and subscriptions. But obviously, as you've seen in Google over time, we always want to lead with user experience. And we do have very good ideas for native ad concepts, but you'll see us lead with the user experience," Pichai said during the call. "But I do think we're always committed to making the products work and reach billions of users at scale. And advertising has been a great aspect of that strategy. And so, just like you've seen with YouTube, we'll give people options over time." If you want a preview of how ads might sneak into Gemini, just look at Google's AI Overviews. These AI-generated search summaries are already discreetly inserting sponsored results. Search for "best ways to remove grass stains," and in the AI-generated blurb, you might see a nice little link to buy a specific detergent. It's not exactly subtle. Google has spent years mastering the art of blending ads into everyday searches, and there's no reason to believe it won't do the same with its AI chatbot. Ads through AI are not a unique Google idea, of course. Microsoft has been playing with ads in its Copilot AI chatbot, as has Perplexity with its sponsored follow-up questions. Amazon has pursued something similar, albeit in reverse, by making its Rufus AI chatbot also offer sponsored suggestions for purchases. If Gemini starts recommending products based on your conversations, will you still want to converse with the AI? Mid-chat sponsored messages might annoy anyone into opting out, but maybe you'll be okay with an ad at the bottom of your chat window. The only thing more inevitable than ads from Google in Gemini is that the company will claim the ads will "enhance the user experience."

Google has some 'good ideas' for putting ads in Gemini

Google is exploring adding ads to Gemini AI. CEO Sundar Pichai floated the idea in an earnings call but did not mention a specific date, according to The Verge. He also noted that the company has "very good ideas" about how it could appear in the future. This year's focus remains on enhancing user experience features and broadening subscription offerings. Pichai noted that advertising has been essential in scaling other Google services, such as YouTube, possibly hinting that ads will eventually come to Gemini. However, Pichai did not mention how Google plans to integrate ads into Gemini when they appear in the AI. He also said they are committed to making the products work and delivering them to a vast audience. Recommended Videos The good news is that you don't have to worry about seeing ads in Gemini, at least not this year. For now, Gemini continues to offer free or paid subscriptions with access to more advanced features. Currently, Gemini Advanced users can access options such as Gemini Advanced 2.0 Flash, Pro, Flash Thinking Experimental, Deep Research, and 2.0 Flash Thinking Experimental with apps. For now, let's enjoy the ad-free experience of Gemini while we can. If you think about it, Google's business model relies heavily on ads, so it is only a matter of time before it gets to Gemini. Google has already incorporated ads in AI Overviews, so why should Gemini be any different? However, Google's ads may get intrusive, and you may find ways to turn off targeted ads on Google. Google also announced that it will spend $75 billion on capital expenditures this year to stay competitive in AI.

Google has 'very good ideas' for native ads in Gemini

Jay Peters is a news editor covering technology, gaming, and more. He joined The Verge in 2019 after nearly two years at Techmeme. Google's Gemini AI assistant doesn't have ads today, but the company has "very good ideas" for ways they could show up down the road, CEO Sundar Pichai said on an investor call this afternoon. Right now, you can access Gemini for free or pay for a subscription to use advanced features, but it sounds like ads could be part of the product at some point. On the call, a Wells Fargo analyst asked Pichai how people should think about the "future monetization opportunity of Gemini" and if Google sees a potential "ad component." Here's my transcription of Pichai's answer, which I've lightly edited for clarity: On the monetization side, for now, we have focused on a free tier and subscriptions. But as you've seen [with] Google over time, we always want to lead with the user experience and we do have very good ideas for native ad concepts. But you will see us lead with the user experience. I do think we're always committed to making the products work and reach billions of users at scale. And advertising has been a great aspect of that strategy. Just like you've seen with YouTube, we'll give people options over time. But for this year, I think you'll see us be focused on the subscription direction. Based on that last sentence, it doesn't seem like you'll have to worry about ads in Gemini at least through this year. But Google's overall business is built on ads, and it seems like we should expect them to come to Gemini at some point. They're already in AI Overviews, after all. Google didn't immediately reply to a request for comment. As part of its earnings, Google also announced that it plans to spend $75 billion this year on capital expenditures to help it keep up in the AI race.

Google's Gemini AI Could Soon Include Ads -- Sundar Pichai Hints At Future Monetization Beyond Subscriptions - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

On Tuesday, Alphabet Inc. GOOG GOOGL CEO Sundar Pichai hinted at potential future monetization strategies for Gemini AI, including the introduction of ads. What Happened: During the company's fourth-quarter earnings call, analyst Ken Gawrelski asked about the long-term monetization strategy for Gemini, particularly whether ads would be integrated into the platform. In response, Pichai confirmed that while the company is currently focused on free and premium subscription tiers, advertising will likely play a role in the future. See Also: Mark Zuckerberg's Meta Pays Trump $25 Million To Settle Lawsuit Over Facebook, Instagram Ban After Jan. 6 Riot: 'A Big Year For Redefining Our Relationships With Governments' "We do have very good ideas for native ad concepts, but you will see us lead with the user experience," Pichai stated, adding, "But I do think we're always committed to making the products work and reach billions of users at scale. And advertising has been a great aspect of that strategy." Comparing Gemini's potential ad model to YouTube's approach, he suggested that Google will offer users choices over time. "Just like you've seen with YouTube, we'll give people options over time," Pichai added. For now, however, Google remains focused on driving adoption through subscriptions, he said. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Why It Matters: During the earnings call, Pichai also highlighted Google's extensive user base, stating that seven of the company's products and platforms, each with over two billion users, are now integrating Gemini. He also underscored Google's leadership in AI, noting that its generative media models and Gemini consistently rank at the top of industry leaderboards and benchmarks. In fact, more than 4.4 million developers are currently using Gemini models -- double the number from six months ago. Alphabet reported fourth-quarter revenue of $96.5 billion, a 12% year-over-year increase. However, it fell short of the Street consensus estimate of $96.6 billion, according to Benzinga Pro. Price Action: As of early Wednesday, Alphabet's Class A shares were down 7.35% in pre-market trading, while Class C shares had fallen 7.08%. On Tuesday, Class A shares closed 2.56% higher at $206.38, while Class C shares rose 2.50% to $207.71. Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Sundar Pichai Downplays DeepSeek Threat -- Google's Gemini Still Leads In Cost, Performance, And Latency Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. Photo courtesy: Google GOOGAlphabet Inc$192.84-7.16%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewGOOGLAlphabet Inc$191.07-7.42%Market News and Data brought to you by Benzinga APIs

Alphabet's AI Bet: Google Plans Ads for Gemini Amid Slowing Growth | PYMNTS.com

Google plans to insert ads in its Gemini multimodal model, following the recent addition of advertisements in the AI Overviews portion of its search engine as it seeks to recoup the high cost of processing AI workloads. "We do have very good ideas for native ad concepts," said Google CEO Sundar Pichai, in a call with analysts to discuss fourth-quarter and year-end earnings on Tuesday (Feb. 4). "But you will see us lead with the user experience" and first making sure it works at scale for billions of people. Gemini ads will not come in 2025. Google said it would focus on offering a free and paid version of Gemini, which competes with ChatGPT. Google already began inserting ads in its AI Overviews, or AI-powered summarized answers to user search queries, since October. Google CBO Philipp Schindler said that thus far, AI Overview ads are monetizing at "approximately the same rate" as ads in traditional Google Search instead of cannibalizing revenue. Schindler added that this bodes well for Google to experiment and "innovate even more." Google's core business, search, is under fire after the tech giant lost an antitrust court case last year accusing it of monopolizing online search and advertising markets by entering into exclusive partnerships. The remedy phase of the lawsuit is yet to be finalized. Morningstar analyst Malik Ahmed Khan wrote in a research note that Google parent Alphabet's priority is to preserve its strong search ad business -- and using AI to keep it in the lead. "We see the firm's investments in AI as a continuation of this effort to safeguard its core product, Google Search," he wrote. "We believe that by leveraging generative AI, Google can not only improve its own search quality via features such as AI Overviews, but also improve its advertising business by augmenting its ability to target customers with relevant ads." Khan said the majority of Alphabet's revenue comes from search. Over the years, Google has invested "considerably" to improve its search capabilities, to ensure that its search engine remains people's preferred choice. Pichai said that DeepSeek proves something the company has known for a long time -- that costs, latency and performance will continue to improve. The CEO pointed to the recently released Gemini 2.0 Flash and Flash Thinking models as "some of the most efficient out there, including compared to DeepSeek's V3 and R1" models. Pichai said it was possible for Google to continue to increase efficiency while improving performance due to its "full stack" approach to AI -- encompassing AI infrastructure, research and applications and platforms -- focus on optimization, and "obsession" with cost per query. Also, the proportion of AI workloads has been shifting from training frontier or cutting-edge foundation models to inferencing when these models are actually used. Typically, training costs are higher than inferencing costs, although the latter can add up over time. Frontier model developers like Google pay for training costs; clients of Google Cloud pay for inferencing costs. "That trend is good," Pichai said. The recent trends towards reasoning, or thinking, AI models is good because these use inferencing. Asked if agentic AI will affect Google search, Pichai said it will only expand the market. "Plenty of room for many new types of use cases to flourish." Alphabet reported net income of $26.5 billion, or $2.15 per share, in the fourth quarter ending Dec. 31, beating the consensus estimate of $2.12 per share. Revenue came to $96.5 billion, slightly below consensus of $96.7 billion, as compiled by Zacks Investment Research. Quarterly revenue in the quarter grew by 12%, which was its slowest pace since 2023. Investors did not like the news, selling off shares by 7% in after-hours trading on Tuesday. Alphabet expects to spend $75 billion in capex this year, mainly towards data centers, servers and networking infrastructure. Khan continues to be bullish on Alphabet. "On the antitrust front, we don't foresee a material deterioration in Google's search business resulting from governmental or judicial intervention," he wrote. "While there is a range of possible outcomes depending on what remedial steps are imposed, we think it is likely that Google will maintain its leadership position in search and text-based advertising in the long term."

Sundar Pichai Claims Gemini Is as Cheap as DeepSeek, Will Push More AI Into Google Search in 2025

Pichai said AI in search will allow users to ask follow-up questions, making Google something more akin to OpenAI's ChatGPT. While the U.S. continues to lead in commercialization, the release of China's DeepSeek has sparked concerns that overseas competition is gaining ground with highly cost-efficient AI models. Like other leading executives, Alphabet's Sundar Pichai has played down the threat of new competition and emphasized how much the tech giant focuses on AI. Gemini as Cheap as DeepSeek During Alphabet's latest earnings call, CEO Pichai bolstered the capabilities of Gemini alongside the offerings from leading companies such as OpenAI and Meta, as well as emerging challengers like DeepSeek. Since its launch, the new challenger has sent shockwaves through the technology industry, rocking the foundations of U.S. dominance with its cheaper and equally powerful model. Discussing DeepSeek, Pichai said he believed they were a "tremendous team" who have done "very, very good work." However, the CEO played down any concerns that it was more efficient than Gemini. Pichai said Gemini's models were "some of the most efficient models out there, including comparing to DeepSeek's V3 and R1." The CEO said that the increase in cheaper AI models worldwide would only help increase their adoption, which would, in turn, help Google due to its billions of users. AI and Search Pichai also believes that 2025 will be a pinnacle year for AI search. The search engine giant is currently on a "journey" of shifting from a traditional list of links to a more interactive, assistant-like experience. Last year, the company implemented AI overviews to its search engine, marking a controversial change to how its billions of users receive information. Following its launch in May 2024, users quickly reported errors with the overviews, including Google stating that humans should eat at least one small rock daily. However, Pichai told staff and investors that the company was only beginning its AI search journey. "As AI continues to expand the universe of queries that people can ask, 2025 is going to be one of the biggest years for search innovation yet," said Pichai in Alphabet's earnings call. Since the release of OpenAI's ChatGPT in 2022, Google has joined other leading tech companies in playing catch-up with AI. Pichai said Google plans to implement more AI features from its research lab, DeepMind, into search throughout 2025. "I think the [Search] product will evolve even more," Pichai said. "As you make it more easy for people to interact and ask follow-up questions, etc., I think we have an opportunity to drive further growth." The Challenges of AI So far, Google has had a rough time while rolling out its AI products. The initial release of AI Overview was rife with questionable responses from users , including strange answers such as "sticking cheese to pizza is better with "non-toxic glue." This wasn't the first time Google had come under fire for AI misinformation. Following the release of Bard, now Gemini, the AI model made a live blunder during its on-stage demo by providing a faulty tidbit about NASA's James Webb Space Telescope. These missteps underscore a broader challenge seen across AI development. Unlike traditional search engines, which pull directly from sources, AI models generate responses based on probabilistic reasoning. As Google and other tech giants push further into AI-driven search and assistants, ensuring the accuracy and trustworthiness of these tools remains a significant hurdle.

Google Q4 2024 Earnings: CEO Pichai Says DeepSeek Models Less 'Efficient' Than Gemini's

'The cost of actually using it is going to keep coming down, which will make more use cases feasible,' Alphabet CEO Sundar Pichai says. Sundar Pichai, CEO of Google Cloud parent Alphabet, took shots at the artificial intelligence models made by DeepSeek that have rocked the technology and investor world, saying that the China-based AI lab's models are less efficient compared to his offers. Although DeepSeek's apparent advancement in making a competitive AI model at a fraction of the cost sent AI chipmaker Nvidia's market capitalization down about $600 billion in the largest drop in U.S. stock market history, Pichai told listeners on his company's latest quarterly earnings call Tuesday that Google's Gemini 2.0 Flash models are "some of the most efficient models out there, including compared to DeepSeek's V3 and R1." Google Cloud parent Alphabet reported results for the three months ended Dec. 31. [RELATED: Google Workspace Partners Expect Big Margin Hit, Blindsided By Gemini AI Price Action] Still, like other tech vendor CEOs reporting earnings since DeepSeek captured headlines-including those of AI rivals IBM and Microsoft-Pichai praised the creators as a "tremendous team" that did "very, very good work" and said that falling AI costs is ultimately a plus for the market. "The cost of actually using it is going to keep coming down, which will make more use cases feasible," Pichai said. "That's the opportunity space. It's as big as it comes. And that's why you're seeing us invest to meet that moment." According to CRN's 2025 Channel Chiefs, Google said that it is working to enable partners to develop an AI strategy and sell AI solutions, improve partner technical skills and increase the amount of professional services going through partners. Google's "obsession with cost per query" and full-stack development approach-including Google's Tensor Processing Unit (TPU) custom-designed AI accelerators-sets the vendor up well as an AI and cloud leader, Pichai said. Pichai said to look forward to more agentic AI experiences coming this year, with agentic AI expanding the AI "opportunity space." "It feels very far from a zero sum game," Pichai said. "There's plenty of room, I think, for many new types of use cases to flourish." When asked about Google's Gemini monetization strategy looking ahead, Pichai said "for now, we are focused on a free tier and subscriptions." "As you've seen in Google over time, we always want to lead with user experience," he said. "We do have very good ideas for native ad concepts, but you will see us lead with the user experience. But I do think we're always committed to making the products work and reach billions of users at scale." Pichai highlighted growth plans for Google's infrastructure, including plans for seven new subsea cable projects and Google data centers delivering "nearly four times more computing power per unit of electricity compared to just five years ago." "Cloud customers consume more than eight times the compute capacity for training and inferencing compared to 18 months ago," Pichai said. Google Cloud revenues hit $12 billion for the quarter, up 30 percent year over year but marking a declaration from the prior quarter's 35 percent growth. Alphabet CFO Anat Ashkenazi said the growth was still "impressive" and the fourth quarter of 2023 proved a strong comparable plus the vendor saw more demand than capacity. "We are in a tight supply-demand situation, working very hard to bring more capacity online," she said. Ashkenazi said on the call that the company expects to spend $75 billion over 2025 in capital expenditures, most of that going "toward our technical infrastructure, which includes servers and data centers." The company's fourth quarter CapEx was $14 billion, "primarily reflecting investments in our technical infrastructure, with the largest component being investment in servers, followed by data centers to support the growth of our business across Google Services, Google Cloud and Google DeepMind." She said to expect activities such as AI writing code, bringing together AI research teams and looking at the company's real estate footprint to help moderate spending. But Alphabet expects "some headcount growth in 2025 in key investment areas such as AI and cloud." Alphabet ended 2024 with about 183,000 employees, about the same as the end of 2023. Pichai said that more than 4.4 million developers are using Gemini models today, double the number from six months ago. Cloud saw the number of first-time commitments more than double compared to 2023. Cloud saw "several" deals worth more than $1 billion close. The number of deals worth more than $250 million doubled from the prior year. The operating income for Google Cloud was $2.1 billion, more than double year over year. Ashkenazi credited "healthy Google Workspace growth," an area solution providers participate in, with an "increase in average revenue per seat." Vertex AI, Google's AI developer platform, saw a fivefold increase in customers year over year, Pichai said. Vertex usage increased twentyfold during 2024. Pichai identified "particularly strong developer adoption of Gemini Flash, Gemini 2.0, Imagen 3 three and, most recently, Veo," Google's video creator model. "We are making dramatic progress across compute, model capabilities and in driving efficiencies," Pichai said. "We are rapidly shipping product improvements and seeing terrific momentum with consumer and developer usage. And we're pushing the next frontiers from AI agents, reasoning and Deep Research, to state-of-the-art video, quantum computing and more."

Sundar Pichai Downplays DeepSeek Threat -- Google's Gemini Still Leads In Cost, Performance, And Latency - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

On Tuesday, Alphabet Inc. GOOG GOOGL CEO Sundar Pichai recognized the progress made by China's DeepSeek but said that Google's Gemini remains ahead in efficiency, cost, and performance What Happened: During Alphabet's fourth-quarter earnings call, analyst Eric Sheridan asked Pichai about the impact of DeepSeek's AI developments. While acknowledging DeepSeek's achievements, he said the Gemini model leads in the Pareto frontier of cost, performance, and latency, outperforming DeepSeek's V3 and R1 models. "If you look at one of the areas in which the Gemini models shine, it's the Pareto frontier of cost, performance, and latency," Pichai said. "And if you look at all three attributes, I think we lead this Pareto frontier." See Also: Mark Zuckerberg's Meta Pays Trump $25 Million To Settle Lawsuit Over Facebook, Instagram Ban After Jan. 6 Riot: 'A Big Year For Redefining Our Relationships With Governments' He also said that the focus on inference over training is paying off. "If you look at the trajectory over the past three years, the proportion of the spend towards inference compared to training has been increasing, which is good because obviously, inference is to support businesses with good ROIC (Return on Invested Capital)." Why It Matters: Alphabet reported total revenue of $96.5 billion for the fourth quarter, reflecting a 12% year-over-year increase. However, this figure fell slightly short of the Street consensus estimate of $96.6 billion, as per Benzinga Pro data. Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox. Meta CEO Mark Zuckerberg also praised DeepSeek's novel approaches but said his company will continue pouring investment in AI infrastructure. Microsoft CEO Satya Nadella also appreciated DeepSeek's innovations but did not confirm if they would lead to reduced AI costs. OpenAI is reconsidering its open-source strategy due to DeepSeek's growing influence. CEO Sam Altman acknowledged that DeepSeek has narrowed OpenAI's lead in AI. Meanwhile, Palantir advised its clients against using DeepSeek's AI models, citing national security concerns. Price Action: As of this writing, Alphabet's Class A shares had dropped 7.59% in after-hours trading, while Class C shares were down 7.27%. Earlier on Tuesday, Class A shares closed 2.56% higher at $206.38, while Class C shares rose 2.50% to $207.71. Image via Shutterstock Check out more of Benzinga's Consumer Tech coverage by following this link. Read Next: Apple's iPad Turns 15 Today: Here's A Throwback To When Steve Jobs Explained Called It The 'Third Category' After Phones And Notebooks Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors. GOOGAlphabet Inc$192.60-4.95%Overview Rating:Good62.5%Technicals Analysis1000100Financials Analysis400100WatchlistOverviewGOOGLAlphabet Inc$190.71-5.23%METAMeta Platforms Inc$703.500.87%MSFTMicrosoft Corp$411.780.21%PLTRPalantir Technologies Inc$102.9022.9%Market News and Data brought to you by Benzinga APIs