Google Considers Fees For AI-Fueled Search Features, FT Says

(Bloomberg) -- Google is considering charging for new “premium” features run by artificial intelligence, the Financial Times reported, marking the first time it would put any of its core product behind a paywall.

The tech giant is mulling options such as adding certain AI search features to its premium subscription services, the FT reported, citing three unnamed people familiar with the plans. Engineers are developing the technology to roll out the service but executives haven't decided whether or when to launch it, according to the report. Google's ubiquitous search engine would continue to be free and ads would appear alongside search results even to subscribers, the FT said. 

“We're continuing to rapidly improve the product to serve new user needs,” a spokesperson said. “We're not working on or considering an ad-free search experience. As we've done many times before, we'll continue to build new premium capabilities and services to enhance our subscription offerings across Google.”

The potential move suggests the Alphabet Inc. unit still hasn't figured out how to incorporate the new, fast-growing technology without threatening its essential advertising business. The shares were down less than 1% in premarket trading Thursday. 

Ever since OpenAI launched ChatGPT in late 2022, Google has found itself on the defensive in the face of the wildly popular chatbot. ChatGPT's ability to give answers to queries in a narrative voice has forced Google to rethink its traditional list of blue links to websites and the lucrative ads that appear alongside them. Meanwhile, in recent years, a new crop of search startups has emerged. Some have tried to persuade users to sign up for paid subscriptions to access generative AI search features, or for better privacy protections.

Last year, Google began testing its own AI-powered search service that combines the personalized, detailed narrative in addition to links to websites and advertising. But it has been slow to incorporate features from its experimental “search generative experience” to the main search engine.

In February, Google added a new paid tier to its consumer subscription service that gives people access to its latest AI model, Gemini. Users who pay for that subscription, called Google One AI Premium, are able to use its advanced Gemini chatbot and access the generative AI model in popular services such as Gmail and Google Docs.

Using generative AI technology to power search queries is “eye-wateringly” expensive, said one former Google employee, who worked on the company's search products. Teams regularly ran benchmark tests on random queries internally to measure how quickly Google's search engine could deliver results — but they didn't run the same tests for Google's AI-powered search product in part because it was so costly, the former staffer said. 

In the wake of ChatGPT's appearance, Google has reoriented its search teams to deploy more people to work on the experimental AI-powered experience, according to another former Google employee. While early feedback was positive, the high cost likely factored into the decision not to roll it out more widely, the person said. A Google spokesperson said the company has been focused on improving issues such as latency and adding new features, and that cost hasn't influenced the company's decisions about how fast to incorporate more AI into search. 

For Google, charging for certain AI search aspects could help the company shake loose some additional revenue, without cannibalizing its core search ad business, said Mandeep Singh, an analyst at Bloomberg Intelligence.

“Given OpenAI has reached a subscription run-rate of $2 billion with consumer subscriptions, we believe Alphabet could see a similar boost to its $15 billion subscription sales,” he wrote in an email.

(Updates with detail on Google's efforts to incorporate AI into search and premarket sharees)

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