Here we go again.

Google admits AI search makes less money, but it’s fixing that with more ads Google’s negative cash flow balloons to -$9.06 billion, and stock price tumbles following Q3 earnings.

This is the consensus in the entire market right now.. Everyone is rushing for the precious AI and no one is checking the balance books. But google thinks they have an idea. Throw ads at it.

The company took in almost $128 billion in Q3 2026, earning more than $26 billion in net income. These may sound like good numbers, but financial markets are not impressed. While revenue is up 25 percent versus last year, net income is almost $9 billion lower. As of this story’s publication, the stock price is down almost 12 percent, and it was down about 13 percent earlier in the day.

The funny thing is google lost their way a long time ago.. about the time they dropped the “do no evil” part and they are paying for it each day. If google stuck by the “do no evil” they would of released an AI and not tried to make it a slopathon. The problem I am seeing here is every LLM is doing the same thing. Sam Altman and the rest of the CEOs are all turning into Smeagle on his way to turning into gollum.

Google is not slowing down—it’s only going to accelerate the shift toward more AI. Like last quarter, Google reported negative cash flow in Q3. The loss actually increased from -$5.8 billion to -$9.06 billion, a situation that is directly attributable to Google’s runaway AI spending. Google had capital expenditures of $51.4 billion in Q3 and says it still expects total 2026 spending to be between $195 billion and $205 billion. In 2027, Google is targeting more than $300 billion of AI investment.

The thing is with all conditions in the market, Google is taking a huge gamble with the market. Because of the market right now while the Dow is ok the market as a whole is starting to look like a wasteland. Banks are pulling back, Real estate is getting very stale in the residential sectors.

 The company’s AI compute infrastructure doesn’t just power Gemini. Countless AI startups pay to run models on Google’s infrastructure. But even the larger AI firms are using venture cash to do it, and if that funding were to dry up, Google’s cloud revenues could go with it.

Where google is making some money is they are injecting there search into everything, it is to the point that you can not take a shit without AI being part of the deal. I’ve brought up the AI goldrush a lot on my site, the only reason google is not drowning is they are strip mining versus using a shovel and not only that they own the mine and the shovels being sold.

While Google’s investments ensure it still turns a profit, the trend of spending more than it earns on products and services (that negative cash flow) could come back to bite it. Search growth is declining, and Google is placing all its eggs in the AI basket. 

Google though as much as it owns it is making the same mistakes as other llms and they bought the mine and the farm and never checked the soil so to speak so when it comes to AI it will hurt in the end when the bills come in.

Attributions from:
https://arstechnica.com/gadgets/2026/10/google-admits-ai-search-makes-less-money-but-its-fixing-that-with-more-ads/