Google-parent Alphabet is exploring the idea of charging users for its innovative AI-powered search features, causing a stir among investors and shareholders. Bank of America analyst Justin Post is advising investors to carefully consider the potential benefits and risks of this move.
On Thursday, Google’s stock fell by 2.8% in response to a report in the Financial Times detailing the potential changes. The new AI features would be integrated into Google’s premium subscription tier, while the traditional search engine would remain free with ads still appearing.
The impact on advertising revenue from incorporating chatbot AI technology into search queries is a major concern for investors. Alphabet is expected to unveil more details about its strategy at the Google I/O 2024 developers event in May. However, the company has not yet made a final decision on whether to start charging for these AI-search features.
Analysts speculate that any potential charges could be used to offset the cost of AI computing or licensing expenses. Another possibility is that charging for AI-driven search features could be a response to lower ad click-through rates on these results.
Meanwhile, Google is currently hosting its annual cloud computing conference from April 9 to April 11. With a strong IBD Relative Strength Rating of 82, Google’s stock has outperformed 82% of all stocks in the past 12 months, solidifying its position as one of the top AI stocks to keep an eye on.
For the latest updates on artificial intelligence, cybersecurity, and cloud computing, follow Reinhardt Krause on Twitter @reinhardtk_tech. Stay tuned to Jala News for more developments on this evolving story.
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