Interesting take on the Gemini ad tier potentialy impacting margins. The SpaceX IPO effect on Alphabet's EPS is something I hadnt considered before, and that could definitly provide a nice boost. I've been following the AI ad integration space closley and the margin dilution concern feels valid shortterm. Your balanced approach here between upside and downside scenarios is refreshing compared to most bullish takes out there.
Hey, great read as alays. Im really curious how the reported 10x cost of AI chatbot searches will balance against Gemini ads being margin dilutive but still a positive overall for TAM expansion.
Chain of thought is as follows: While AI Chatbot searches are more expensive than traditional google searches, Google's TPUs (used for gemini) will help to reduce cost pressures. Long term margin dilutive, short term margin accretive (Gemini is likely unprofitable today). As for TAM expansion, (1) Google's informational searches are hardly monetised (2) Gemini's searches are likely informational -> when you spend 10 minutes chatting to an AI bot, informational searches could become monetisable commercial ones.
Interesting take on the Gemini ad tier potentialy impacting margins. The SpaceX IPO effect on Alphabet's EPS is something I hadnt considered before, and that could definitly provide a nice boost. I've been following the AI ad integration space closley and the margin dilution concern feels valid shortterm. Your balanced approach here between upside and downside scenarios is refreshing compared to most bullish takes out there.
Hey, great read as alays. Im really curious how the reported 10x cost of AI chatbot searches will balance against Gemini ads being margin dilutive but still a positive overall for TAM expansion.
Chain of thought is as follows: While AI Chatbot searches are more expensive than traditional google searches, Google's TPUs (used for gemini) will help to reduce cost pressures. Long term margin dilutive, short term margin accretive (Gemini is likely unprofitable today). As for TAM expansion, (1) Google's informational searches are hardly monetised (2) Gemini's searches are likely informational -> when you spend 10 minutes chatting to an AI bot, informational searches could become monetisable commercial ones.