Alphabet loses record $500 billion as AI disrupts search ads

Alphabet Inc. shares plunged over 13 percent, erasing a record US$500 billion in market value after disappointing search and advertising sales fueled investor fears that AI is threatening its core business. The Google parent reported third-quarter sales of US$111.2 billion, excluding partner payouts, missing analyst projections. Ad sales from search grew at their slowest pace in five quarters, with executives attributing the shortfall to AI Mode's lower monetization. The results highlight the strain of massive AI infrastructure spending on Alphabet's cash flow. Alphabet's future obligations for computing and energy now exceed US$1 trillion, and the company posted negative free cash flow for a second straight quarter. Google Cloud was a bright spot, beating estimates, though analysts noted many of its top customers are AI rivals like Anthropic.