Google shares are plunging due to AI spending

The tea bag was invented in 1901 by two women named Roberta Lawson and Mary McLaren, who patented it and everything. Seven years later a New York tea merchant named Thomas Sullivan sent out loose leaf samples in silk pouches purely to save money on packaging. His customers didn’t read the instructions, dunked the whole bag in boiling water, and told him it worked brilliantly.

Sullivan took the feedback, ran with it, and got credited with inventing the tea bag for the next century. Two women held the patent. A man accidentally spilled tea and got the Wikipedia page.

What’s in store:

Google's $500 billion oopsie.
Your boss might soon be available on the App Store.
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Read Time: 5 minutes

GOOGLE

A trillion dollars and a prayer

Google's parent company, Alphabet, saw its shares fall more than 13%, wiping over $500 billion from its market value after disappointing third-quarter results raised concerns about its huge AI spending.

The company reported $111.2 billion in revenue, excluding payments to partners, falling short of expectations.

Its search advertising business, which helps pay for Google's AI projects, also recorded its slowest growth in five quarters.

Google admitted that its AI Mode search feature makes less money from advertising than regular searches, although it plans to add more ads.

Meanwhile, the company expects to spend up to $205 billion on AI infrastructure this year, more than double last year's amount.

You could hear investors screaming in the distance

Its future spending commitments for computing power, energy and data centres now exceed $1 trillion.

Google has also spent more cash than it generated for two quarters in a row, raising further concerns about its rising costs.

Google Cloud performed better than expected, bringing in $30.7 billion in revenue and $11.1 billion in profit.

However, other parts of the business struggled:

Advertising sales missed expectations, with YouTube bringing in $11.2 billion.
The company earned $2.12 per share, well below the $2.99 analysts expected.
Google continues to launch new models, including Gemini 4 and Carbon, as it competes with OpenAI and Anthropic.

Alphabet now faces growing pressure to show that its massive AI investments can bring in enough money to cover their costs.

At this rate, Gemini's next feature will be applying for a loan. -MG

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OPENAI

The corporate ladder has a USB port

Two OpenAI employees have shared their predictions for how AI could change the workplace, including how people work, who manages teams, and what happens to jobs.

In a new essay, they describe three ways AI could become part of companies as the technology improves.

The authors suggest AI could take on three different roles:

Employees manage AI tools that handle everyday tasks, giving people more time to focus on bigger responsibilities.
AI works alongside human employees, taking on projects or even running entire teams under human supervision.
AI helps oversee employees, checks their work, spots problems, and advises company leaders.

Annual review now comes with a CAPTCHA

The essay also looks at how AI could affect salaries, hiring, and the size of companies.

The authors believe AI could cut down on paperwork, give employees more freedom, and help smaller teams get more done.

However, it could also lead to closer monitoring of workers and give senior managers more control.

These are predictions rather than certain outcomes, but the authors expect companies to use a mix of all three approaches as AI improves.

Imagine your line manager is an AI. -MV

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