Behind the Numbers: "When and How Will Google Monetize AI Search? Will It Reconcile Its AI Chatbots? And More — The 3 Big Questions for Google" (Feb 19, 2026)

Episode Overview

In this episode of Behind the Numbers, host Marcus is joined by EMARKETER Senior Director of Content Jeremy Goldman and Principal AI Analyst Nate Elliott for an in-depth discussion on the future of Google in the age of AI. The trio explores the company's explosive financial growth, the fundamental business questions AI poses to Google’s search and commerce businesses, the immense capital expenditure on AI, and the confusion resulting from Google's multiple chatbot products. Their conversation revolves around the "three big questions" for Google in 2026, providing marketers, advertisers, and tech watchers with a valuable look at the strategic crossroads facing one of tech’s largest players.

Key Discussion Points & Insights

1. Will Google Let AI Search Replace Traditional Search?

• Context: Google’s 2025 revenues exceeded $400 billion, with nearly $300 billion from advertising, mainly search ([02:29-03:41]).
• Nate’s View: The industry is asking if Google wants AI-driven search (AI Overviews, AI Mode, Gemini, etc.) to fully replace traditional search.
  • "Do they want to get to the point where every search result that's served up by google.com...is responded to with an AI response?" — Nate Elliott ([03:41])
• Strategic Balance: Google can experiment thanks to its enormous user base; it may push toward AI search and pull back if user friction increases, all while watching time-on-platform metrics.
  • "If they notice that that's creating more friction, then they start to pull that back." — Jeremy Goldman ([04:55])
• Monetization Dilemma: Google excels at monetizing traditional search, but a reliable AI search revenue formula hasn't emerged.
  • "What they don't know yet...is how do we make reliable...advertising revenue off of AI search or AI interactions in general?" — Nate Elliott ([05:51])
  • Notable Quote: "Search isn't losing to AI, it's funding it." — Marcus, quoting Jason of Ink ([07:17])

2. When and How Will Google Monetize AI (Both Search and Commerce)?

• Ads in AI Search: Google is moving slowly, unlike OpenAI which has begun testing ads in ChatGPT. Ads are present but rare in Google’s AI Overviews and absent in Gemini ([05:51-07:55]).
• Indirect Monetization via Commerce:
  • Jeremy questions whether Google will profit by facilitating rather than directly completing checkouts, unlike OpenAI's aggressive approach of charging merchants.
    • "Can Google monetize AI commerce indirectly while others try to chase direct checkout?" — Jeremy Goldman ([08:15])
  • Nate notes OpenAI charges a 4% service fee on Shopify transactions (more than Shopify itself), while Google hasn't implemented transaction charges for its Universal Commerce Protocol ([09:30]).
• Data from EMARKETER's Forecast: AI-driven US online retail commerce is growing fast but remains a small fraction (projected <9% by 2029). Most AI-driven commerce will involve users clicking to retailer sites rather than completing transactions inside the chatbot.
  • "95% of the AI-driven transactions this year will happen on retailer sites and apps. Only 5% will happen inside the chatbots." — Nate Elliott ([10:57-12:06])

3. Are Google’s Massive AI Investments (CapEx) Justified?

• CapEx Numbers: Alphabet’s AI/data infrastructure CapEx for 2026 is forecasted at $175-185 billion—30% more than expected, and nearly all of Google’s net income for the past six quarters ([12:06-14:44]).
  • Diverging expert opinions: Some see this as prudent "buying the future," others call it a "sizable gamble" ([12:06]).
• Unique Position: Google can fund this CapEx from its own profits (vs. OpenAI/others reliant on outside capital) and has multiple monetization avenues: ads, subscriptions, selling chips and enterprise services.
  • "Google...is panning for gold, and it's also selling shovels, right? It's also selling the equipment you need to go pan for gold...they've got a diamond mine out back." — Nate Elliott ([15:49])
• Impact on Cloud: The AI buildout is driving surging cloud revenues for Google—cloud’s 2025 revenue is around $70B with operating margins over 30%, validating the CapEx as potentially profitable ([16:40]).
  • Memorable Moment: Marcus: "Proof that the AI build out isn't just a bonfire of GPUs, but something that can throw off real profit whilst it scales." ([16:40])
• Market Risks: The unprecedented CapEx boom raises the possibility of a DeepSeek-style disruption (a smaller competitor achieving similar results for less), echoed by Evercore’s Mark Mahaney.

4. Will Google Reconcile Its Two Competing AI Chatbots?

• Current State: Google has two main LLM chatbot products—Gemini (run by the AI org) and AI Mode/AI Overviews (run by the search team), leading to confusion and duplicated efforts ([19:23-20:45]).
  • "Somehow we've gotten to the point where Microsoft is better at branding its AI tools than Google is." — Nate Elliott ([20:13])
  • In an ideal world, Nate says, "they’d have one organization in charge of all this."
• Reasons for Duality: Organizational silos, but it’s a branding, product, and decision-making liability.
• Possibility of Reconciliation: No urgency from Google's side—they could run dual tracks indefinitely. There are strategic reasons to keep Gemini ad-free and reserve AI Overviews for monetized environments ([22:39-23:57]).

5. Ads in AI and the Ethics of Monetization

• Anthropic’s Stance: Anthropic has openly committed to keeping its Claude chatbot ad-free, differentiating it for trust and sensitive problem-solving.
  • "Ads inside AI conversations would undermine trust in a tool built for work reasoning and sensitive problem solving." — Marcus quoting Jeremy's piece ([24:22])
• History Repeats: Jeremy points out that every new internet surface eventually gets ads despite initial resistance. Anthropic may claim ad-free status now, but business realities could force change later.
  • "The history of the Internet is we have spaces that don't have ads. And then somebody says we're going to start showing ads there. And people are like, 'I can't believe that might not work.' And then it does over time and we get used to it." — Jeremy Goldman ([25:28])
• OpenAI's "Code Red" for Monetization: OpenAI has moved aggressively to implement ads and fees—evidence of their desperation for revenue compared to Google’s flexibility ([21:28]).

Notable Quotes & Memorable Moments

• "Search isn't losing to AI, it's funding it." — Marcus quoting Jason of Ink ([07:17])
• "Google...is panning for gold, and it's also selling shovels...they've got a diamond mine out back, so they're in a pretty good position." — Nate Elliott ([15:49])
• "Somehow we've gotten to the point where Microsoft is better at branding its AI tools than Google is." — Nate Elliott ([20:13])
• "The history of the Internet is we have spaces that don't have ads. And then somebody says we're going to start showing ads there...and then it does over time and we get used to it." — Jeremy Goldman ([25:28])
• "Code red on top of a code red..." — Nate Elliott referring to OpenAI's frantic monetization moves ([22:19])

Key Timestamps by Segment

• [03:41] — Nate introduces the question of AI search replacing traditional search
• [05:51] — The challenge of monetizing AI search and the status of AI ads in Google products
• [08:15] — The rise of AI-driven commerce and the indirect monetization model
• [10:57] — Details from EMARKETER's AI commerce forecast
• [12:06] — The CapEx debate: is Google spending too much to build AI infrastructure?
• [15:49] — Google's multi-pronged approach to monetizing AI and unique competitive position
• [16:40] — Impact of AI investment on Google Cloud revenues
• [18:16] — The unprecedented scale of tech’s current CapEx investments
• [19:23] — Why does Google have two AI chatbots, and will it reconcile them?
• [20:45] — The confusion and inefficiency resulting from Google’s organizational silos
• [22:39] — Discussion of why Google might want to keep dual chatbot tracks
• [24:22] — The question of ads in chatbots and Anthropic’s ad-free commitment
• [25:28] — Historical precedent for ads appearing on every new tech “surface”

Consensus: The Three Big Questions for Google (2026)

1. When and how will Google monetize AI search?
   Can Google find a scalable, reliable revenue stream as user behavior migrates from traditional to AI-powered results—and what is the timeline for this transition?
2. How can Google make money from AI-driven commerce?
   Will Google profit mainly by enabling commerce, rather than handling direct transactions—and can this be a meaningful revenue stream as "AI commerce" grows?
3. Will Google reconcile its two AI chatbots, and what strategy underpins having both Gemini and AI Overviews?
   Is separate branding and development sustainable—or will Google need to unify offerings for consumer clarity and operational efficiency?

For Listeners Who Missed the Episode

This conversation goes far beyond tech headlines, digging into how Google’s unparalleled resources let it experiment at a scale others can’t match—but also exposing the company to challenges of brand management, gigantically risky bets on infrastructure, and the ever-present question: can Google keep its cash machine running as the digital landscape shifts under AI’s influence? If you want to understand both the optimism and the anxiety inside Google’s HQ (and the marketer/advertiser point of view), this episode is essential listening.