Google hit by the AI revolution it helped spark - LeMonde.fr

At Google's offices in New York, July 1, 2026. ALEKSANDRA MICHALSKA/REUTERS Google is above all a formidable advertising machine. Yet, that machine has jammed, sending its shares plunging on Wednesday, October 28, by around 10% in after-hours trading. Artificial intelligence (AI) is weakening, if not killing, the company's cash cow. Google seems to be belatedly suffering what it inflicted on media outlets around the world, by eating into their advertising revenue. The explanation: with AI, users are relying less on search engines, which reduces exposure to traditional online advertising. As a result, revenue at Google's services division, 85% of which comes from advertising, reached $96.3 billion (€88.2 billion) in the third quarter of 2026, below the $98.5 billion the market had expected. Google's search advertising revenue grew 12% year-on-year in the third quarter, compared with 17% in the second quarter and 19% in the first: a notable slowdown. The second setback: The company is investing so heavily in the AI race that it posted a staggering negative free cash flow of $9.1 billion, against expectations of just $3.5 billion. These are not losses, but the company, which announced its first capital increase in 20 years in the spring, has to borrow or raise funds to finance its capital spending, which reached a whopping $51.4 billion in the third quarter. The announcement echoes the experience of the other online advertising giant, Meta, whose shares plunged on October 22 after it reported negative free cash flow of $2.1 billion. You have 62.42% of this article left to read. The rest is for subscribers only.