Google is investing over $75 billion in AI infrastructure in 2025–26, according to its earnings disclosures, as it races to defend its search monopoly against AI-native competitors like OpenAI, Perplexity, and its own former engineers' startups. The spending is transforming its products — but also compressing its margins and raising the stakes of its ongoing U.S. antitrust battle.

Here is a number that should keep every Google competitor awake at night — and every Google shareholder slightly queasy. Seventy-five billion dollars. That is what Alphabet disclosed it would spend on capital expenditure in a single year, the vast majority of it funnelled into AI data centres, custom tensor processing chips, and the infrastructure to run its Gemini family of models at planetary scale. According to Alphabet's quarterly earnings filings, the figure represents a near-doubling from just two years prior. No company in history has bet this much, this fast, on a technology whose ultimate revenue model remains, to put it politely, a work in progress.

And yet, the truly unsettling thing about that $75 billion is not the size of the cheque. It is the reason Google has to write it.

For two decades, Google's business model was elegantly simple: organise the world's information, put it behind a search bar, and sell the attention of the people who came looking. According to Statcounter's global data for early 2026, Google still commands roughly 90 percent of worldwide search traffic. On paper, that looks like dominance. In practice, as industry analysts at firms like Gartner and Bernstein Research have noted, it is a kingdom watching the moat slowly drain. The threat is not that users are leaving Google today — it is that the next generation of information-seekers may never form the Google habit at all.

OpenAI's ChatGPT crossed 300 million weekly active users by late 2025, according to OpenAI's own disclosures. Perplexity AI, a search-first answer engine, grew its query volume tenfold in under eighteen months, as reported by TechCrunch. Apple's quiet integration of its own on-device AI into Safari and Siri, combined with its courtship of multiple AI providers rather than defaulting to Google, signals a tectonic shift in distribution. The question people are actually asking when they search for "Google" today is not "how do I use it" — it is "does it still matter the way it used to?"

The AI Overviews Gamble

Google's most visible response is AI Overviews — the AI-generated answer summaries that now sit atop search results for a growing share of queries. According to Google's own I/O 2025 keynote, AI Overviews serve over a billion users monthly. The company frames this as evolution: search becomes smarter, users get answers faster, everyone wins.

The reality, as publishers and advertisers have discovered, is more complicated. Multiple analyses, including a widely cited Authoritas study covered by Search Engine Land, found that AI Overviews reduced organic click-through rates by as much as 34 percent for queries where an AI summary appeared. For Google, this creates a paradox worthy of a Greek tragedy written by an algorithm: the better the AI answer, the fewer links the user clicks, and therefore the fewer ad impressions Google sells. The company is, in a very real sense, cannibalising its own cash machine to stay relevant.

India Herald's read of what is really driving this is not technological ambition — it is existential arithmetic. Google's advertising revenue, which still accounts for roughly 77 percent of Alphabet's total revenue according to its latest 10-K filing, depends on users clicking through to websites. AI Overviews keep users on Google's own page. The company is betting it can invent new ad formats fast enough — sponsored AI answers, product carousels within summaries — to replace the revenue it is destroying. That is not a strategy; that is a high-wire act performed at $75 billion altitude.

Inside Talk

The talk in Bengaluru's tech corridors, and among product managers who have rotated through Google's India operations, is that internally the mood is a strange cocktail of pride and anxiety. Pride, because Gemini's capabilities — particularly in multilingual processing relevant to India's dozen-plus language markets — are genuinely world-class. Anxiety, because the company's own middle management can see what the earnings reports obscure: the cost of serving an AI-generated answer is estimated at six to ten times the cost of serving a traditional set of blue links, according to estimates cited by Morgan Stanley analysts. Scale that across billions of queries and the margin compression is not theoretical — it is arriving quarterly.

There is also quieter chatter about Google's antitrust exposure. The U.S. Department of Justice's landmark ruling in 2024, which found Google had maintained an illegal monopoly in search, is now in its remedies phase, as reported by Reuters and The New York Times. Among the remedies under consideration: forcing Google to end or renegotiate its estimated $20 billion annual payment to Apple for default search placement on iPhones. If that deal unravels, Google loses not just distribution but the single most valuable consumer funnel in the history of technology. Industry insiders suggest the company is already hedging — its aggressive push of Gemini into Android, Pixel devices, and its own hardware ecosystem is partly an insurance policy against the day Apple stops being a partner.

(This section reflects industry chatter and analyst speculation, not confirmed internal Google communications.)

What This Means for India — and for You

India is not a sideshow in this story. It is the main stage. With over 800 million internet users, according to the Telecom Regulatory Authority of India's latest subscriber data, India is Google's largest market by user count. The company's AI-first push here — from Gemini integration in Google Pay to AI-powered crop advisory tools for farmers — is both a growth play and a testing ground.

But the competitive landscape is fracturing. As India Herald recently explored, legacy platforms like Rediff are seeing unexpected search revivals — a signal that Indian users are not passive recipients of whatever Silicon Valley ships. Indian startups like Krutrim and Sarvam AI are building large language models for Indic languages, and Reliance's Jio is quietly assembling its own AI stack. The assumption that Google will remain India's default digital gateway is, for the first time, genuinely contestable.

For the average Indian user, the immediate impact is more subtle than dramatic. Search results are changing shape — answers appear before links, AI summaries replace the need to visit three websites, and the line between a search engine and an AI assistant is blurring. According to a January 2026 survey by consulting firm RedSeer, 41 percent of Indian urban internet users reported using an AI chatbot at least once a week — up from under 10 percent just two years prior. Google is no longer competing for your search. It is competing for your question.

The $20 Billion Question Nobody Is Asking Loudly Enough

Strip away the product launches, the developer conferences, the breathless coverage of each new Gemini benchmark, and the story distils to something the market has not yet priced in. Google's core business — advertising sold against search intent — is a product of a world where information was scattered and Google was the organiser. In a world where AI can synthesise that information before the user even finishes typing, the organiser becomes the organised. The middleman becomes the product.

Alphabet's stock price, which has roughly doubled since early 2023, reflects investor faith that the company can navigate this transition. But as any student of technology history knows, the companies that dominate one paradigm rarely dominate the next. IBM dominated mainframes and missed PCs. Microsoft dominated PCs and nearly missed mobile. Google dominated search — and the $75 billion question is whether spending enough money on AI can defy that pattern, or whether it is simply the most expensive way to learn you cannot.

The next twelve months will tell us more than the last twenty years. If Google's new ad formats within AI Overviews achieve revenue parity with traditional search ads — something the company has not yet demonstrated publicly — the $75 billion bet pays off and Alphabet becomes the most valuable company on Earth. If they do not, and if the Apple distribution deal is broken or renegotiated downward by antitrust remedy, Google will still be immensely profitable but will have crossed the invisible line from growth stock to value stock — from the company that defines the future to the company that once did.

That is the real reason thirty-eight thousand people search for "Google" every hour. Not because they need directions or want to translate a phrase. Because somewhere, instinctively, the world is checking whether the thing they have relied on since they first opened a browser is still the thing it was — or whether it is already becoming something else, something smaller, something that used to be inevitable and is now merely very, very large.

[EMBED-SUGGESTION:tweet]

Reported and written with AI assistance under India Herald's editorial standards; a human editor governs publication.

More from India Herald

ViralIHG's Emotional Map?The search term 'eng बनाम ind' has surged past 50,000 queries in a single hour — not because a match is breaking news, but because this riva…SportsIHG's Most Explosive Lower-Order Hitter Keep Missing the Bus?Shivam Dube is trending at 20,000 searches an hour — but the real story isn't the spike, it's a decade-long puzzle: how does a left-handed p…PoliticsIHGAfter more than a decade of bureaucratic deadlock, PM Modi's Melbourne visit quietly sealed the uranium supply pact — a move that secures In…ViralIHG't Just Vijay's Last Film — It's a Ballot Box Dressed as a Box Office. Who Bought the Ticket?Vijay's farewell film Jana Nayagan is the most searched term in India right now — but the frenzy isn't really about cinema. It's about a man…ViralIHGIn a landscape ruled by Zerodha dashboards and Groww notifications, Rediff Money's stubborn 50,000-plus daily search volume is not nostalgia…

Key Takeaways

• Google's $75 billion annual AI capex is a defensive bet to protect its search-advertising flywheel, not a pure growth investment — the company is cannibalising its own click-through revenue with AI Overviews to prevent users from migrating to AI-native competitors.
• The U.S. antitrust remedies phase could force Google to end its estimated $20 billion annual payment to Apple for default search placement — a potential loss of the most valuable consumer distribution channel in tech history.
• India, with 800 million+ internet users, is Google's largest market and the primary testing ground for its AI-first pivot, but rising competition from Indian AI startups and Reliance's Jio AI stack makes Google's dominance genuinely contestable for the first time.
• 41 percent of Indian urban internet users now use an AI chatbot weekly, up from under 10 percent two years ago — Google is no longer competing for searches but for questions, a fundamentally different business.

Frequently Asked Questions

Why is Google spending $75 billion on AI?

Google is investing heavily to defend its search monopoly against AI-native competitors like OpenAI and Perplexity. The spending goes toward data centres, custom AI chips, and Gemini model development to power features like AI Overviews in search, according to Alphabet's earnings disclosures.

What are Google AI Overviews and how do they affect search?

AI Overviews are AI-generated answer summaries displayed atop Google search results. While they serve over a billion users monthly according to Google, studies like the Authoritas analysis found they reduce organic click-through rates by up to 34%, potentially cannibalising Google's own advertising revenue.

How does Google's antitrust case affect its future?

A U.S. federal court found Google maintained an illegal search monopoly. The remedies phase could force Google to end its estimated $20 billion annual default-search payment to Apple, potentially removing its most valuable distribution channel, according to Reuters and NYT reporting.

Is Google still dominant in India?

Google remains the dominant search engine in India with over 800 million internet users in the market. However, competition is growing from Indian AI startups like Krutrim and Sarvam AI, and Reliance's Jio AI stack, while 41% of urban Indian users now use AI chatbots weekly, per RedSeer's January 2026 survey.

Will Google remain the default search engine?

That depends on two factors: whether its new AI-based ad formats can replace revenue lost to reduced click-throughs, and whether antitrust remedies strip its Apple distribution deal. Analysts suggest the next twelve months will be decisive in determining Google's trajectory.

More from India Herald

ViralIHG's Emotional Map?The search term 'eng बनाम ind' has surged past 50,000 queries in a single hour — not because a match is breaking news, but because this riva…SportsIHG's Most Explosive Lower-Order Hitter Keep Missing the Bus?Shivam Dube is trending at 20,000 searches an hour — but the real story isn't the spike, it's a decade-long puzzle: how does a left-handed p…PoliticsIHGAfter more than a decade of bureaucratic deadlock, PM Modi's Melbourne visit quietly sealed the uranium supply pact — a move that secures In…ViralIHG't Just Vijay's Last Film — It's a Ballot Box Dressed as a Box Office. Who Bought the Ticket?Vijay's farewell film Jana Nayagan is the most searched term in India right now — but the frenzy isn't really about cinema. It's about a man…ViralIHGIn a landscape ruled by Zerodha dashboards and Groww notifications, Rediff Money's stubborn 50,000-plus daily search volume is not nostalgia…