Google Takes Ads in AI Mode Global as Search Growth Slows

Google said on October 28, 2026 that it is expanding ads in AI Mode into international markets, disclosing the move on Alphabet's third-quarter earnings call. The same day, Alphabet reported $127.6 billion in revenue for Q3 2026, up 25% year over year, and its shares fell 8% after the results.

The headline ad figure was softer than the top line. TechCrunch reported that Google Search revenue grew 12% year over year in Q3, down from 17% in Q2 and 19% in Q1. Before the report, Reuters had expected Search growth to slow to 14.7%. CNBC had put consensus at $3.02 in earnings per share and $128.2 billion in revenue, so reported revenue landed slightly below the revenue estimate.

Google's Chief Business Officer, Philipp Schindler, said the company is scaling high-quality ads within AI Overviews (the AI-generated summaries that sit above or alongside standard results) in AI Mode to more users and queries. That takes its monetization footprint global for the first time. Google also announced multi-turn ads, which appear across a back-and-forth conversation rather than a single query, and expanded AI Mode in the U.S. alongside the international rollout. Schindler said click-through rates for sponsored product listings in AI Mode are comparable to those for organic listings. That comparison is the figure advertisers will want to test in their own accounts.

On the usage side, Sundar Pichai said Search queries grew at their fastest year-over-year rate in five years during Q3. Queries in AI Mode are three times longer on average than traditional searches, and one in five AI Mode searches globally involves voice, images, or documents, which is what the industry calls multimodal input. Google has also surpassed 50 billion visual searches per month. Longer, multimodal queries give the ad system more context per impression, which is the technical rationale behind the pitch. The company has not released per-query yield data alongside these figures.

The segment split shows the scale of the mix shift. Google Services generated $96.3 billion in revenue in Q3, up 11%. Google Cloud reported $30.7 billion, up 103%. Alphabet had already raised its 2026 capital expenditure projection to $180 billion to $190 billion, a figure Reuters reported earlier in the year.

The international expansion builds on products Google has been rolling out for more than a year. Its AI Max for Search campaign type, which Google describes as a one-click solution that brings Google AI into Search campaigns, is now available to all advertisers globally, according to a September 2025 Google blog post. In May 2026, Google introduced new ad formats built with Gemini in Search and expanded its Direct Offers pilot for shoppers. Google's Ads & Commerce blog lists a post titled “Ads in AI Mode expand to new markets.”

In my view, the quarter exposes a tension that advertisers and investors will weigh together. Search is still growing in absolute terms, and query volume is accelerating, yet the reported Search growth rate fell sharply from the first half of the year. Whether AI Mode's longer, higher-intent queries can offset slower growth in classic blue-link inventory is the question the next few quarters will answer. The market's 8% reaction suggests investors have not yet been persuaded.

For practitioners, the operational detail matters more than the headline. Global availability means measurement, brand-safety controls, and bidding behavior in AI Mode will now be tested across languages and regulatory regimes at once. Advertisers who built campaigns around AI Max will be watching whether the same automated bidding and creative tools carry over cleanly to conversational, multi-turn formats.

The broader context here is that search has moved from a list of ten links toward a dialogue, and the ad unit is moving with it. The upside is that users are asking more specific, more useful questions, and advertisers who can match those intents may find more qualified attention. The open risk is that the transition is still being priced in, and the company has to show that the new format grows revenue faster than it erodes the old one.