Google says that its AI-based search query responses, AI Overviews, had over 1.5 billion users across the world as of the first quarter of 2025 (ending March 31). “For AI Overviews overall, we see the monetization at approximately the same rate, which gives us a strong base on which we can innovate even more,†the company’s Senior Vice President Philipp Schindler mentioned during the earnings call. This indicates that the company is having the same success monetizing Overviews as traditional search results.
The company had launched ads within AI Overviews in October last year. Since then, it has expanded AI integration within Google Search and launched AI Mode as part of an early experiment in March this year. AI Mode allows Google Search users to ask complex, multi-part questions and also pose follow-ups. Through AI Mode, Google is trying to bring its Gemini models into Search. The company mentioned that AI Mode queries are twice as long as traditional search queries. “People [are] typing longer queries; there’s a lot more complex, nuanced questions. People are following through more,†Google CEO Sundar Pichai said, discussing the early feedback for AI Mode.
Key points from earnings call:
Differences in how the company views AI overviews and AI mode:
“Within Search, we think of AI Overviews as scaling up and working for our entire user base, but AI Mode is the tip of the tree for us pushing forward on an AI-forward experience,†Pichai explained. However, he added that there will be things the company discovers in its experimentation with AI Mode that it will add to Overviews.
More people are using visual search for shopping:Â
The company mentioned that, as of Q1 FY25, there has been a 10% increase in the number of people using Google Lens. Monthly searches through Google Lens have increased by five billion since October 2024. The company also reported an increase in multimodal queries, specifically Circle to Search (where users can search for an item by encircling it). “Circle to Search is now available on more than 250 million devices, with usage increasing nearly 40% this quarter,†Pichai mentioned.
Improvement in YouTube revenues:Â
As of Q1, YouTube has 125 million subscribers globally, including users trying out the YouTube Premium and Music subscriptions. Besides subscriptions, the company earns revenue through advertising. As of March, YouTube’s advertising revenue stood at $8.9 billion, a 10% year-on-year increase compared to the same period last year. The rise in advertising revenue was driven by direct response (ads designed to get viewers to click), followed by brand ads (which increase brand awareness).
Besides visual content, people are also consuming podcasts on YouTube. As of March, the service has one billion monthly active podcast listeners. Discussing YouTube’s short-form video content—Shorts—Schindler mentioned that the number of engaged viewers for the service increased by 20% in Q1.
Rising capital expenditure:
Google’s capital expenditure (capex) increased by 43.33% year-on-year between Q1 FY24 and Q1 FY25, rising from $12 billion to $17.2 billion. The company says that its capex primarily reflects investments in technical infrastructure, “with the largest component being investment in servers, followed by data centers.†Through these investments, Google intends to support its business across Google Services, Google Cloud, and Google DeepMind.Advertisements
The company expects to invest $75 billion in capex this year. Discussing capex spends, Anat Ashkenazi, SVP and CFO for Google, mentioned that in Q4 FY24, the company had seen more demand for Google Cloud than it had capacity. “And that was the case this quarter as well. So, we want to make sure we ramp up to support customer needs and customer demands,†he explained.
On trailing behind ChatGPT in Daily Active Users:
During the earnings call, an investment firm representative mentioned that Gemini has 35 million daily active users (DAUs). “That number obviously trails ChatGPT by a pretty wide margin,†he said, asking Pichai what strategy the company is considering to increase its DAUs. Pichai responded that the company has seen people engage with Gemini more in the past couple of weeks as it rolled out newer models. He also reiterated the number of people using AI Overviews, which he said shows that users are engaging with Google’s AI products in a very meaningful way.
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