Google hosted its annual I/O developer convention final week. Predictably, each product showcase emphasised AI-enabled performance; this video gives a useful, 10-minute overview of all the things that was highlighted. Google revealed a number of new options and core merchandise on the occasion, together with:
- Two new subscription plans for Gemini: Google AI Professional ($19.99 / mo) and Google AI Extremely ($249.99 / mo);
- A “Deep Assume” mode for the Gemini 2.5 mannequin;
- “Agent Mode” for the Gemini app and expanded performance for Mission Mariner, each of which are actually obtainable for Google AI Extremely subscribers. It’s not clear how these options are differentiated (Mission Mariner was launched into beta late final yr as a browser-based agent), as they each present agentic capabilities;
- Veo 3, an up to date video generative mannequin that may additionally produce audio, and Imagen 4, an up to date picture era mannequin.
- Stream, an AI film-making software primarily based on Veo 3.
However the firm made two different revelations at I/O that present readability round its business technique with AI. The primary is the introduction of “AI Mode” to Search, which was rolled out to US-based customers on Might twentieth. AI Mode makes use of Mission Mariner to convey “extra superior reasoning, pondering and multimodal capabilities” to Google Search queries: basically, it’s a search-optimized chatbot accessible from the homepage.
Google introduced at Google Advertising Dwell, the advertising-focused facet occasion held the day after the I/O mainstage occasion, that advertisements are already dwell in AI Mode. Additional, at I/O, the corporate unveiled a digital dressing room function that makes use of AI Mode to assist facilitate product discovery and buying instantly from the question.
I view AI Mode because the pure and apparent development of what I’ve referred to as Google’s gambit: its crucial to transition Search from a content material distribution mechanism to a content material sink, capturing consumer engagement by AI-enabled interplay touchpoints and monetizing that elevated engagement with promoting. From that piece:
As a distribution mechanism, Google optimizes to generate one click on per search: a consumer considers a search question profitable if it results in a click on to the suitable vacation spot from the primary web page of outcomes. However the incentive with AI Overviews could be very clearly totally different: it’s to unravel the consumer’s wants with out resulting in a click on, probably whereas instigating additional queries and, due to this fact, elevated time spent with AI Overviews. And advertisements are displayed every time AI Overviews are rendered, probably main to at least one click on per question because the consumer refines their search. In impact, with AI Overviews, Google can seize the conversions and advert clicks that happen subsequent to a profitable search question within the present distribution mechanism configuration.
It appears clear that Google seeks to execute a whole Ship of Theseus transformation of Search from a hyperlink rating product right into a fully-contained shopper discovery engine that facilitates commerce by its chatbot and with different, novel options just like the aforementioned digital becoming room. AI Mode is solely in step with Google’s motivations associated to the open internet: as I talk about in Google was the open internet’s imperfect benefactor, with its Community enterprise threatened by the result of its “advert tech” antitrust trial, Google has little incentive to protect Search’s function as a content material discovery software since it might not be capable of absolutely or effectively monetize the engagement that takes place on internet locations. I made the purpose extra pointedly in a current interview with Ben Thompson on Stratechery:
And also you may say, “Watch out what you would like for”, as a result of in the event that they lose whichever a part of the Google community enterprise, it could possibly be the provision facet, could possibly be the demand facet, they’ve zero incentive to assist the open internet … What are they already doing? They’re already inserting AI overviews into the complete above the fold phase of Google search and if they are saying, “Look, we simply don’t care concerning the open internet anymore, we are able to’t monetize it”, then they’re going to desire all the businesses that they’ve knowledge licensing offers with, like Reddit, to desire and prioritize these ends in the AI overviews, drive visitors to them, instantiate that suggestions loop and earn a living on the advertisements that they serve on AI overviews.
This technique seems to be working: Google revealed at I/O that, “in [its] largest markets, just like the US and India, AI Overviews are driving over 10% progress within the forms of queries that present them. What’s notably thrilling is that this progress will increase over time.” Additional, the corporate famous in its Q1 2025 earnings report that AI Overviews are monetizing “on the identical charge” as Search. If AI Overviews is growing question quantity whereas attaining the identical stage of monetization as Search, why would Google wish to protect conventional Search? AI Mode appears explicitly designed to cannibalize outbound search consequence clicks even additional.
Taken collectively, these updates trace at Google’s intent to totally reposition Search: not as a place to begin for third-party content material navigation, however as a self-contained commerce and discovery platform constructed round AI engagement.
The second revelation from I/O that brings Google’s business AI technique into sharper focus was extra refined: Sundar Pichai famous that Gemini with personalization, a product function launched in March, can be utilized to Gmail with Personalised Good Replies, which permit generative textual content to be tailor-made to the linguistic patterns of the consumer. However the function was described in much more common and far-reaching phrases than that:
Together with your permission, Gemini fashions can use related context throughout your Google apps in a method that’s non-public, clear, and absolutely underneath your management … Gemini can do nearly all of the work for me: wanting up my notes in Drive, scanning previous emails for reservations, Gemini matches my typical greetings from previous emails, captures my tone, type, and favourite phrase decisions, after which it routinely generates a reply.
What Pichai describes right here isn’t merely a Gmail function: it’s a broadly-applicable personalization engine that Google could also be singularly positioned to construct and deploy, given the a number of touchpoints — and huge pool of knowledge — it enjoys with most customers throughout Gmail, Search, Drive, Maps, and elsewhere. Word that what’s being described isn’t a mannequin skilled on user-level knowledge, which is impractical. This sounds much more profound: a mannequin utilized to the output layer of Gmail, however related in lots of extra contexts, that determines how and the place personalization could be completed utilizing that consumer’s cross-product knowledge footprint as enter.
Given the various breadth of merchandise that Google operates, the corporate has an awfully privileged place in bringing personalization to bear for its customers. Electronic mail building is an apparent and pretty tame software, however the use instances are almost countless. If Google’s instruments can actually personalize output using the various volumes of knowledge collected throughout its multitude of floor areas, then its AI instruments stand one of the best likelihood at offering an all-in-one agentic expertise. And thru its pricing mannequin, Google appears to be nudging shoppers on this path: the $249.99 month-to-month Google AI Extremely subscription is priced to preclude the potential of a shopper subscribing to a number of AI instruments.
A premium shopper pricing tier isn’t distinctive: ChatGPT Professional is $200 per thirty days, and Anthropic’s Claude Max is $100 per thirty days. And whereas different fashions can connect with a consumer’s Google Workspace account through API, which might provide learn entry to a consumer’s Gmail account, Google has the advantage of the totality of the information generated by its customers in logged-in state, throughout its properties in addition to Chrome. Google lords over a useful trove of diversified historic knowledge for every of its customers that’s incomparable in quantity and scope.
And clearly, Google’s capability to personalize AI output is instantly associated to its potential to personalize the advertisements uncovered to its prospects, with elevated engagement delivering extra knowledge to make use of for precisely that goal. Google launched AI Max for Search Campaigns, an automatic suite of concentrating on and keyword-matching instruments, in early Might, and the corporate launched Good Bidding, which adjusts bids dynamically, on the Google Advertising Dwell occasion. These units of instruments share the identical basic goal — personalization — and they’re mutually reinforcing. Google’s potential to ship elevated engagement with AI Overviews and AI Mode gives not solely extra alternatives to reveal advertisements, however as engagement throughout different floor areas deepens by personalization, the corporate gathers extra and higher knowledge for concentrating on advertisements.