Google unleashes AI-powered search overhaul as it battles for dominance in post-ChatGPT era

Google unleashes AI-powered search overhaul as it battles for dominance in post-ChatGPT era

In a sweeping reassertion of its dominance—and a bid to catch up with OpenAI’s explosive rise—Google unveiled a major AI-powered overhaul of its search experience this week at its annual developer conference. Touting a “total reimagining of search,” CEO Sundar Pichai introduced a new “AI mode” powered by the company’s Gemini large language models, embedding conversational answers directly into the search bar, browser, and mobile apps, the Financial Times reported.

The move comes amid growing investor pressure and intensifying competition from ChatGPT, Perplexity, and Microsoft’s Copilot. It marks Google’s most aggressive response yet to the existential threat generative AI poses to its $198 billion-a-year search advertising business.

Sergey Brin reemerges, calls AI ‘more transformative’ than the internet

In a rare public appearance, Google co-founder Sergey Brin said he’s working daily in the company’s AI lab and called artificial intelligence “vastly more transformative” than any previous tech wave. “Honestly, anybody who’s a computer scientist should not be retired,” he told attendees, underscoring Google’s all-in commitment to reaching artificial general intelligence.

The event also served as a symbolic reset. After early missteps and embarrassing AI hallucinations in 2023, Pichai and his team launched AI mode as a polished, default-integrated product for US users—offering faster, more accurate responses and eliminating the clumsy misfires of last year’s “AI Overviews.”

The innovators’ dilemma: Reinvent search, or cannibalize it?

Google’s greatest challenge remains the so-called innovators’ dilemma: how to transform the search experience with AI without destroying the business model that funds nearly every corner of Alphabet. Search ads remain the company’s largest and most profitable engine—and also the most vulnerable if users bypass links in favour of chatbot answers.

“Monetisation of AI in search is all that matters,” said Melius Research’s Ben Reitzes. “They better move fast before OpenAI figures it out first.”

Google’s answer includes paid subscriptions for high-end AI tools like Mariner (a digital agent that can perform tasks in the background) and Veo (video creation), with pricing ranging from $20 to $250/month. The company is also integrating “hyper-targeted” ads into AI answers—complete with “sponsored” tags—and pushing innovations like try-on shopping tools and augmented reality glasses.

Still, analysts warn that these new products must prove profitable without cannibalizing core ad revenue. Google’s stock rose 3% after the announcements but still lags behind rivals Microsoft and Meta this year.

The rise of rivals: Perplexity, ChatGPT, and the Apple wildcard

Despite still commanding 90% of global web searches, Google faces rising threats. OpenAI’s ChatGPT now claims 600 million monthly users, compared to 400 million for Gemini. Perplexity, a two-year-old AI search startup with 30 million users, is in talks with Apple to become a Safari search option—jeopardizing one of Google’s most lucrative defaults.

Perplexity CEO Aravind Srinivas called Google’s new AI mode a “carbon copy” of his own product, though he admitted Google’s reach will be hard to rival. “It is very vulnerable because the business is decided around one front end: search,” he told the Financial Times.

A turning point for Google—and the AI economy

Google also used the conference to flex its broader AI ambitions, from Project Astra (a multimodal real-time assistant that can see and hear through phones or glasses) to deeper personalization of Gemini responses based on users’ browsing, maps, and calendar data.

James Manyika, Google’s SVP of tech and society, said ads will become “more helpful and targeted” thanks to AI’s contextual intelligence. But early cracks have appeared: just days after launch, a shopping tool erroneously added breasts to images of men—including US Vice President JD Vance.

Still, internally, executives are defiant. “Large language models and the whole modern AI era wouldn’t exist without us,” said a DeepMind executive. “We’ve done more than any other company in the world to advance the field.”

As Pichai told attendees, AI will not shrink Google’s empire—it will expand it. “When you go to those places, you have a much better intent,” he said of AI referrals. “Those are much higher quality for advertisers.”

The question that remains: can Google reinvent search without eroding the foundation beneath it? Investors and competitors alike will be watching the answer unfold in real time.