Alphabet, Google's parent company, lost just over $500bn (£374bn) in market value on Thursday after its latest quarterly update. The stock hit a six-month low and closed at a total market value of $3.46 trillion, down from $3.97 trillion the day before.
Alphabet reported total revenue of $127.6bn, up 25% from a year earlier. Google Cloud revenue grew 103% to almost $31bn. Profits fell 25% during the quarter, and the company reported negative free cash flow of more than $9bn, according to the BBC report. The report says this is the company's second such negative result as a public company, and nearly twice the cash loss it showed three months earlier.
The report says Google's search engine now defaults to AI summaries of users' queries, and that this affected the number of ads the company could sell during the quarter. Ad sales on Google Search results make up the vast majority of Alphabet's business.
Tracy Woo, a principal analyst at Forrester, said Alphabet's search results "highlight the challenge of funding massive AI investments while maintaining the strength of established businesses."
Phillip Schindler, Google's chief business officer, said on Wednesday that he felt "very good about our trajectory" with the AI-focused version of search. Still, the stock fell almost 13% on Thursday, its second-lowest showing this year.
The report says Microsoft and Amazon also updated investors this week and outlined plans to keep spending heavily on AI.