--- title: AI is squeezing Google’s search growth – and its cash description: Alphabet's AI build-out is straining its finances even as cloud revenue surges. The company burned $9.1 billion in free cash flow in the quarter, its second... canonical: https://daily.dev/posts/ai-is-squeezing-google-s-search-growth-and-its-cash-uczmv0sbw twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: AI is squeezing Google’s search growth – and its cash | daily.dev og:description: Alphabet's AI build-out is straining its finances even as cloud revenue surges. The company burned $9.1 billion in free cash flow in the quarter, its second... og:url: https://daily.dev/posts/ai-is-squeezing-google-s-search-growth-and-its-cash-uczmv0sbw og:image: https://api.daily.dev/og/posts/uczmv0SBw.png og:image:alt: AI is squeezing Google’s search growth – and its cash og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # AI is squeezing Google’s search growth – and its cash **[TechCentral](https://daily.dev/sources/techcentral)** · 4 min read · 0 upvotes · 0 comments ## Summary Alphabet's AI build-out is straining its finances even as cloud revenue surges. The company burned $9.1 billion in free cash flow in the quarter, its second straight negative quarter, against analyst expectations of near break-even. Advertising revenue missed estimates at $82 billion, and shares fell 10% after hours. Google Cloud revenue more than doubled to $30.71 billion, with a backlog of $561 billion. Alphabet's 2026 capital expenditure forecast is $195-205 billion, and it plans to increase spending significantly in 2027. Google also unveiled its new Gemini 4 Carbon model the same day, and Bernstein analysts asked whether it was rushed as an offset to softer financial metrics. ## Full article daily.dev links to this article rather than hosting it. Read it at the original source: ## Questions this post answers ### Why did Alphabet's free cash flow go negative this quarter Alphabet reported negative free cash flow of $9.1 billion, driven by heavy spending on AI and cloud infrastructure build-out. This was the second consecutive quarter of negative free cash flow, following a $5.9 billion burn the prior quarter, the first negative quarter in 22 years as a listed company. Capital expenditure is planned to rise to $195-205 billion in 2027. _Investors weighing AI infrastructure bets can follow spending trends like these on daily.dev._ ### How much did Google Cloud revenue grow in Q3 Google Cloud revenue more than doubled to $30.71 billion in the third quarter ending September 30, beating analyst estimates. Its backlog grew to $561 billion, with more than 55% expected to be recognized as revenue within 24 months. TPU systems sales also became a meaningful contributor to the cloud business. _Developers evaluating cloud providers can track growth signals like this on daily.dev._ ### Why did Alphabet's search advertising growth slow down Chief business officer Philipp Schindler attributed the slowdown to greater use of AI Mode, a chatbot interface for search where Google is still experimenting with ads. Ad revenue came in at $82 billion against expectations of $83.4 billion. Google plans to roll out ads in AI Mode to international markets. _Those assessing AI's impact on ad-driven products can follow updates like this on daily.dev._ ## Similar posts on daily.dev - [Google Cloud surpasses $20B but says growth was capacity-constrained](https://daily.dev/posts/google-cloud-surpasses-20b-but-says-growth-was-capacity-constrained-dwkufb0q4) · TechCrunch · 0 upvotes · 0 comments - [Google dominance is cracking in the AI era](https://daily.dev/posts/google-dominance-is-cracking-in-the-ai-era-ozzlwqpwe) · The Next Web · 2 upvotes · 1 comments --- Tags: [#tech-news](https://daily.dev/tags/tech-news), [#cloud](https://daily.dev/tags/cloud), [#gcp](https://daily.dev/tags/gcp), [#google-gemini](https://daily.dev/tags/google-gemini) [View this post on daily.dev](https://daily.dev/posts/ai-is-squeezing-google-s-search-growth-and-its-cash-uczmv0sbw) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"AI is squeezing Google’s search growth – and its cash","url":"https://daily.dev/posts/ai-is-squeezing-google-s-search-growth-and-its-cash-uczmv0sbw","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/ai-is-squeezing-google-s-search-growth-and-its-cash-uczmv0sbw"},"datePublished":"2026-10-29T05:54:57.413Z","dateModified":"2026-10-31T04:57:19.197Z","description":"Alphabet's AI build-out is straining its finances even as cloud revenue surges. 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