According to Report, Alphabet recently announced that its Google One subscription service, which charges users for cloud storage and AI capabilities, had surpassed 150 million members.
Since February 2024, over six years after the service’s introduction, when Google One surpassed 100 million subscriptions, that represents a 50% rise.
In the same month, Google unveiled a $19.99/month subscription that gave customers access to AI features that were not available to free users. The business still offers cheaper Google One subscription tiers for file storage, but they lack the majority of AI functions.
According to Shimrit Ben-Yair, a Google vice president in charge of the subscription service, the new AI tier was responsible for “millions” of memberships.
Alphabet is working to diversify beyond advertising, which generated nearly three-quarters of its $350 billion in total revenue in 2024. Google One is part of this strategy.
As Alphabet struggles with the danger of AI chatbots, such as OpenAI’s ChatGPT or Google’s own Gemini, to its search engine dominance, its success with subscriptions may be crucial to its long-term financial prospects.
For the first time ever, an Apple executive testified in court this week that AI offerings led to a drop in searches on Apple’s (AAPL.O) Safari browser. The iPhone manufacturer plans to launch AI-powered search capabilities, which is a setback for Alphabet, which saw a $150 billion drop in market value that day.
Ads have not yet been seamlessly included into AI interfaces, in contrast to search engines. Instead, a lot of businesses charge customers based on product consumption or through subscriptions.
How Google will adjust has been questioned by investors.
CEO Sundar Pichai responded, “Just like you’ve seen with YouTube, we’ll give people options over time,” when asked about Gemini’s monetization attempts during an earnings call in February. “For this year, I think you’ll see us be focused on the subscription direction.”
