Alphabet Announces First Quarter 2026 Results

- https://www.rip-grep.com/microsoft

I open Google Search. If I want an LLM, I click “AI Mode.”

I only bother to open Gemini or ChatGPT or Claude if it’s a “big research thing” which is almost never.

Non-commercial queries are basically a loss-leader for Google. They don't care about them, except that they keep people in the habit of Googling things whenever they need information, which is critical for the whole business model to work. That's why ChatGPT was such a threat: for a while it looked like people might get out of the habit of Googling things and instead just ask ChatGPT, which would've been disastrous. But they seem to have headed it off with Gemini and AI mode. I was just researching something new today, and while I felt like Claude gave slightly better responses, AI mode gave more convenient responses, with direct links and browser integration.

This is why commoditized LLMs aren't a threat. If it's commoditized, people just go to the one which already fits their habits, which is AI mode. And they don't charge anything anyway, so competing on price doesn't work.

New computing devices that don't default to Google Search are a threat. But that's why Google funded Chrome, and Android, and paid Apple billions to be the default search provider in Safari and iOS, and paid Mozilla billions to be the default search provider in Firefox. As long as the results for non-commercial queries aren't actively bad, it'll likely be hard to convince people to switch away from them, particularly given existing habits.

If I had to list the biggest threats to Google's stock price, I'd put them as:

1. A global macro downturn. Google's stock has been pretty macro-sensitive since COVID, because as the tollkeeper to the economy, their revenues directly depend on how many economic transactions there are. If say the Straight of Hormuz crisis results in stagflation, even if it's stagflation in Asia and Australia and Europe rather than the U.S., Google's going to feel it. You even saw that with the ~20% swoon in the early days of the crisis.

2. Dead Internet Theory. If people just give up on the Internet because it's boring or not good for their kids or filled with bots or just not useful, and return to their local communities, this is also the end of Google. There've been some moves in this direction (eg. we're raising our kids to socialize in person with neighbors instead of going online, and many teenagers today think the Internet is decidedly Not Fun), but it also needs to be much more widespread, and get around the fact that many niche products are only available online.

3. Internal decay. I'm an ex-Googler, still have a couple of (increasingly disenchanted) friends there, though many of my friends have retired or left in the last few years. It is a shitshow inside, with a mess of perverse incentives, sometimes incompetent executives, and employees who don't care and are just phoning it in while the stock price goes up. I'd still get questions on code I wrote in 2010, from teams in Bangalore who were just taking over the legacy search stack, who would ask me things because I was literally the only one left at the company from when the code was written and I'd be like "How the hell should I know? I left this project 15 years ago, left the company, haven't worked on Search since 2014, had several other positions, came back, several billion lines of code has been written on top of it since then, still don't work on Search nor do I actually write code anymore, no I can't answer whether this code is important or whether anything will break if you get rid of it." Particularly now that ~75% of the code at Google is written by AI, there's a decent chance that somebody or some AI will introduce a change that breaks the golden goose, it won't be caught until several million more lines of AI-generated code have been checked in on top of it, and that'll be the end of the fabulous machine known as Google. Reportedly this is what happened to Twitter DMs, they used AI to check in some code that broke the feature, nobody knew how to get it working again, and so they just unlaunched it.