One of the big worries for Google investors was the cost of running AI to show within its search results. The AI overviews, now AI answers are costly to run. But as expected, Google was able to reduce the cost to generate these AI Answers.
The Information wrote that Google was able to reduce the cost of these AI generated responses in search by 80%. Google's Sundar Pichai mentioned this as well in the earnings call.
Google said on the call, "For example, since introducing SGE about a year ago, machine costs associated with SGE responses have decreased 80% from when first introduced in Labs, driven by hardware, engineering, and technical breakthroughs."
The Information wrote:
"A person who has worked on search at Google said the company experimented with using different-size AI models to answer different types of queries.""In addition to achieving cost reductions, Google has also tried to make the feature more efficient by triggering it only when the company thinks it would be better than a traditional set of search results, this person said."
"Pichai’s comments, combined with the fact that Google’s share of the search market has barely budged over the past year, suggests those worries were unfounded. “People questioned whether these things would be costly to serve, and we are very, very confident we can manage the cost of how to serve these queries,” Pichai said on the earnings call last week."
Glenn Gabe summed this up nicely:
Many are/were concerned about the cost of AI/SGE results -> Google has managed to lower the cost of showing artificial intelligence–generated answers to queries 80% over the last year
— Glenn Gabe (@glenngabe) May 1, 2024
"A person who has worked on search at Google said the company experimented with using… pic.twitter.com/UHKUqi8aFr
I was never worried about Google reducing its costs to generate these AI answers.
My bigger concern is the lack of clicks these AI Answers may generate both organically and for paid search.
Forum discussion at X.
