Google gave us a pretty good idea of where AI Mode is headed during its Q3 2026 earnings call on Wednesday. And it involves a lot more ads.
Google’s Chief Business Officer Philipp Schindler told analysts that “click-through rates are already similar between sponsored and organic product list items within AI Mode.” In other words, when AI Mode shows you a list of products, you’re just as likely to tap a paid one as an unpaid one. Google VP Robbie Stein confirmed ad experiments in AI Mode last fall, and sponsored results started showing up for more users shortly after.
That’s exactly what advertisers want to hear. And it’s a big deal for Google, which needs AI Mode to start pulling its weight.
AI Mode is booming, but it isn’t paying the bills just yet
Google CEO Sundar Pichai said Search queries are growing at their fastest rate in five years. AI Mode queries are about three times longer than traditional searches, and one in five now use voice, images, or documents. Google is also handling over 50 billion visual searches a month, thanks to tools like Lens and Circle to Search.
The problem is that Google makes less on each AI Mode query right now. Search revenue hit $63.35 billion in the quarter, up 12% year-over-year, but that’s a slowdown from Q2. Schindler pointed to currency swings, softer retail spending in Asia-Pacific, the post-World Cup cooldown, and lower monetization in AI Mode.
So ads are the fix. If people click sponsored products as often as organic ones, Google can add more of them without hurting engagement. That matters when Google plans to spend $195 billion to $205 billion on capex this year, much of it on AI infrastructure. Not to mention, ads are coming to Google’s Gemini agent too.
For you, this means the next time you ask AI Mode which phone or pair of earbuds to buy, expect more sponsored picks mixed in. Google does label them, but in a conversational answer, that line gets blurry pretty quickly. I’d keep an eye out for that “Sponsored” tag.
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