Google and Meta have printed money for two decades, but AI is now pulling them in opposite directions. In the third quarter, Meta’s ad revenue jumped 26% to $63.1 billion, more than double the 12% growth of Google’s search business, which brought in $63.4 billion. That 14-point gap is the widest in Meta’s favor since 2021, and the two are now nearly the same size.
The reason is simple. Meta uses AI to help advertisers target better and build campaigns faster, and almost 10 million of them tried at least one of its AI tools last quarter. Google faces a tougher problem: people now ask chatbots like ChatGPT, Claude and Meta’s new Muse instead of clicking search links. Emarketer analyst Nate Elliott calls that shift “potentially catastrophic” for Google’s ad business. Investors agreed. Alphabet had its worst trading day ever, dropping over 12% and losing about $500 billion in market value.
Meta isn’t safe either. Its stock fell 14% in October, and ads still make up 98% of its sales. Both giants are spending heavily on AI, up to $205 billion for Google and $145 billion for Meta this year. Google does have a cushion, though: its cloud business more than doubled to $31 billion in quarterly revenue.
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