Google Q3: AI Mode hits 75M DAUs, its queries doubled - what changes for your budgets

Executive Snapshot: Google Q3 2025 AI Mode and AI Overviews

Google positioned Q3 as an expansion phase for Search, attributing query growth to AI-led surfaces. The company indicated that AI experiences are adding queries while maintaining web traffic, and revenue momentum provides runway for continued AI investment. The snapshot below aggregates the most decision-useful points from Alphabet’s Q3 earnings materials.

• AI Mode usage and rollout: Queries in AI Mode doubled in Q3; AI Mode reached roughly 75 million daily active users; rollout expanded globally across 40 languages; more than 100 product improvements shipped in the quarter [S2][S3].
• AI Overviews impact: Management said AI Overviews continued to "drive meaningful query growth," with the effect "even stronger" in Q3 and more pronounced among younger users [S2][S3].
• Search demand: Overall queries and commercial queries grew year over year, with Q3 growth faster than Q2, per management commentary [S2].
• Revenue: Alphabet revenue was $102.3 billion; Google Search and other revenue reached $56.6 billion, up from $49.4 billion year over year; YouTube ads revenue was $10.26 billion [S1]. Google cited Nielsen that YouTube has been No. 1 in U.S. streaming watch time for more than two years, and said Shorts now earns more revenue per watch hour than traditional in-stream in the U.S. [S2][S5].
• Costs and guidance: Q3 included a $3.5 billion European Commission fine; excluding the charge, Alphabet reported a 33.9% operating margin [S1][S4]. 2025 capex guidance was raised to $91-$93 billion, primarily to support AI [S2].

Implication for marketers: Expect distribution to shift inside Google toward AI-led search sessions, not a contraction of total search demand [S2][S3].

Method & Source Notes

This report synthesizes Alphabet’s Q3 2025 financial press release, earnings call commentary, CEO blog post, and regulatory filings, plus Nielsen data cited by Alphabet. Financial metrics are from audited or reviewed financial statements; product usage metrics such as AI Mode DAU and query growth are management-reported and not independently audited.

• What was measured: Alphabet revenue and segment revenue; management disclosures on AI Mode usage, AI Overviews query impact, query growth, YouTube watch time positioning, Shorts monetization per watch hour, capex guidance, and regulatory charges [S1][S2][S3][S4][S5].
• Methodology: Revenue figures derive from GAAP financial statements; product adoption and behavioral metrics come from Alphabet’s internal telemetry; Nielsen figures represent panel-based U.S. TV viewing estimates [S1][S2][S3][S5].
• Key limitations: No third-party verification of AI Mode DAU or query growth; Google did not disclose outbound click share or click-through rates from AI surfaces; no geographic split for AI usage beyond selected remarks; Nielsen’s TV measurement excludes some device contexts and is U.S.-only [S2][S3][S5].

Some of these product dynamics were described by Sundar Pichai in his CEO blog post.

Findings: Search demand, monetization, and AI feature adoption

AI features and search usage

Google reported that AI Mode is seeing strong and consistent week over week growth in the U.S., with queries doubling in Q3. AI Mode reached roughly 75 million daily active users, rolled out globally across 40 languages, and received more than 100 improvements during the quarter [S2][S3]. Management said AI Mode is already driving incremental total query growth for Search, indicating it is additive to baseline search behavior rather than substitutive [S2]. AI Overviews were credited with meaningful query growth, with the impact even stronger in Q3 and more pronounced for younger users, signaling cohort differences in adoption [S2].

"Our AI experiences highlight the web and send billions of clicks to sites every day."

Sundar Pichai [S3]

Revenue, YouTube, and investment posture

Alphabet delivered $102.3 billion in total revenue, marking its first $100 billion quarter. Google Search and other reached $56.6 billion, versus $49.4 billion a year earlier, and YouTube ads revenue reached $10.26 billion [S1]. On the call, Google cited Nielsen in noting that YouTube has remained No. 1 in U.S. streaming watch time for more than two years, and stated that in the U.S., Shorts now earns more revenue per watch hour than traditional in-stream [S2][S5]. The quarter included a $3.5 billion European Commission fine; excluding the charge, Alphabet reported a 33.9% operating margin [S1][S4]. Looking ahead, management raised 2025 capex guidance to $91-$93 billion to meet AI demand and referenced upcoming product advances, including a planned Gemini 3 model and more agentic capabilities in Chrome tied into Gemini and AI Mode [S2][S3]. The revenue backdrop and capex stance imply continued prioritization of AI-led search surfaces and supporting infrastructure [S1][S2].

Interpretation & Implications

The bullets below categorize implications by certainty based on the evidence disclosed.

• Likely: AI-led search sessions are additive to total Google search activity. Budget planning should assume stable or rising query volume within Google, with more sessions initiated in AI Mode and surfaced through AI Overviews [S2][S3].
• Likely: Commercial search intent remains healthy. The combination of Search and other revenue growth and management’s comment that commercial queries grew year over year supports sustained investment in paid search, particularly in high-intent segments [S1][S2].
• Likely: YouTube remains a high-reach video channel. The Nielsen-cited leadership and Shorts monetization comments indicate a strong ad surface mix across formats, including short form [S2][S5].
• Tentative: Younger users engaging more with AI Overviews suggests creative and content structures that yield direct, concise answers - for example, clear FAQ sections and structured data - may improve presence within AI-led snippets for certain queries [S2].
• Tentative: If Shorts earns more revenue per watch hour than in-stream in the U.S., short-form inventory may be comparatively efficient for certain objectives. Validate performance against brand and direct response goals due to format differences [S2].
• Tentative: Expect more AI model-driven product changes - for example, Gemini 3 and agentic Chrome features. Engineering velocity implies ongoing shifts in result presentation and user flows. Teams should monitor position exposure and session depth changes in analytics [S2][S3].
• Speculative: If AI Mode and AI Overviews widen top-of-funnel exposure but compress click-out rates on some query classes, organic traffic impact may vary by category. Because Google has not provided click-through or share metrics, use controlled tests and cohort analysis to quantify effects by SERP feature [S2][S3].

Contradictions & Gaps

Google provided directional statements about traffic to the open web - "billions of clicks" - without disclosing outbound click share, click-through rates from AI modules, or reporting fields to track AI surface exposures in Search Console or Ads [S2][S3]. AI Mode’s 75 million DAU and "queries doubled" are high level but omit baseline timeframes, regional splits, session depth, or retention, limiting comparisons to historical search behavior [S2]. YouTube Shorts' "revenue per watch hour" claim applies to the U.S. and does not specify advertiser ROI, eCPMs, or auction dynamics by format [S2]. The EC fine and operating margin disclosure clarify profitability optics, but unit economics of AI search - cost per query and model inference costs - were not quantified. Capex guidance signals spend, not per feature costs [S1][S2][S4]. Net: measurement coverage lags adoption, requiring internal analytics to assess channel and SERP feature performance.

Data Appendix

This section consolidates the core numbers cited by Alphabet and related sources for quick reference.

• Alphabet revenue (Q3 2025): $102.3 billion [S1]
• Google Search and other revenue (Q3 2025): $56.6 billion vs. $49.4 billion year over year [S1]
• YouTube ads revenue (Q3 2025): $10.26 billion [S1]
• European Commission fine: $3.5 billion; operating margin excluding charge: 33.9% [S1][S4]
• AI Mode: queries doubled in Q3; about 75 million DAU; global across 40 languages; more than 100 improvements in the quarter [S2][S3]
• AI Overviews: meaningful query growth, stronger in Q3; more pronounced among younger users [S2]
• YouTube: No. 1 in U.S. streaming watch time for 2+ years, per Nielsen; Shorts earns more revenue per watch hour than in-stream in the U.S. [S2][S5]
• 2025 capex guidance: $91-$93 billion [S2]
• Product roadmap signals: Gemini 3 planned; Chrome integrating Gemini with agentic capabilities [S2][S3]

Sources

• [S1] Alphabet Inc. Q3 2025 earnings press release and materials - see Q3 earnings.
• [S2] Alphabet Inc. Q3 2025 earnings call and transcript: AI Mode and AI Overviews usage and impact; Shorts monetization comment; capex guidance; product roadmap remarks.
• [S3] Sundar Pichai CEO blog post on Q3 2025: "expansionary moment for Search," web click statements, AI highlights.
• [S4] Alphabet Inc. Q3 2025 Form 10-Q: legal charge disclosure and additional financial detail.
• [S5] Nielsen The Gauge (U.S. TV streaming viewership share), as cited by Google regarding YouTube’s U.S. leadership over more than two years.