Google is reportedly drawing up plans to charge for AI-enhanced search features, which would be the biggest shakeup to the company’s revenue model in its history.
The radical shift is a natural consequence of the enormous costs required to provide the service, experts say, and would see every leading player in the sector offering a variety of subscription models to cover costs.
Google’s proposals, first reported by the Financial Timeswould mean the company is offering its new search feature exclusively to users of its premium subscription services, which customers already have to sign up for if they want to use artificial intelligence assistants in other Google tools like Gmail and its office suite.
That search experience, which is in beta testing for select users, uses Google’s generative AI to respond directly to questions with a single answer, in a style similar to the conversational approach of ChatGPT and competitors.
“AI search is more expensive to compute than Google’s traditional search processes. So when charging for AI searches, Google will try to at least recoup these costs,” said Heather Dawe, chief data scientist at digital transformation consultancy UST.
Much of the focus within AI is on the enormous cost of the computing power used to train advanced generative models. In the past year, Amazon hosted a single training course that cost $65 million. according to James Hamilton, an engineerwho expects the company to break the $1 billion mark in the near future.
Last week OpenAI and Microsoft announced plans to build a $100 billion data center for AI training in January Mark Zuckerberg said his goal would spend at least $9 billion on Nvidia GPUs alone.
But the cost of training AI is only a tenth of the industry’s total costs, according to analyst Brent Thill of investment firm Jefferies. Thill wrote in a briefing note: “The majority of AI compute spend today is focused on running models, not training them, and more than 90% of AI compute spend today is on inference (the process where an AI model is developed). requested), because inference spending has grown much faster than training, as more models and tools are put into production.”
He added: “Some have priced new Gen AI features on a monthly basis, betting that higher fees will cover usage costs, while others have chosen per-use pricing to protect themselves on the cost side. Some have also been included in existing plans, in the hope of stimulating (user) growth.”
Competitors in AI search offer similar plans. Bewildermentan AI-powered search engine, it doesn’t serve ads but offers a $20 monthly “pro” tier that provides access to more powerful AI models and unlimited usage.
However, others continue to offer their products at a loss. The AI features in Microsoft’s Bing are free to use, but tied to the company’s Edge browser. Browser and search startup Arc offers its products for free to users and says it plans to generate revenue in the future by charging companies for business features.