Is AI Taking Over Shopping and Search? The Day Google's "AI Victory" Changed Market Sentiment

Is AI Taking Over Shopping and Search? The Day Google's "AI Victory" Changed Market Sentiment

The rise in Alphabet's (Google's parent company) stock price shows no signs of stopping. While the market has been buzzing with the term "generative AI supremacy battle," the recent mood is somewhat different. The focus of the competition has shifted from just the "intelligence of the model" to "distribution" and "revenue pathways," and in this phase, Google is seen as consistently securing wins.


"Victory in AI" is not about research achievements but commercial "implementation wins."

A frequently mentioned topic in the context of the recent stock surge is the change in investors' perspectives. Previously, scenarios like "AI will destroy search" and "ChatGPT will replace search" dominated, predicting the "death of search." However, recently, the possibility that AI experiences might actually generate additional questions and deeper exploration, thereby increasing search behavior (queries), has started to be discussed. Deepwater Asset Management has also commented that AI experiences stimulate users' desire for additional information, leading to a stronger than expected persistence in search.


What is important here is that Google is not passively waiting for "search replacement," but is actively redesigning search, advertising, and purchasing with AI to recapture the next actions "on their own turf."


The significance of Apple choosing Gemini: Acquiring a massive distribution network from "outside"

A symbolic event is the news that Apple will base its next-generation AI features on Google's Gemini. Reports indicate that Alphabet's market capitalization temporarily reached the $4 trillion level in this flow, strongly impressing the shift in investor sentiment.


AI is difficult to win with just "creating a good model." Those who control the pathways users interact with daily—OS, browsers, devices, and search—are strong. In that sense, Gemini's integration into the iPhone, an overwhelming life infrastructure, is akin to acquiring an "AI distribution network."


This point also sparked strong reactions on social media. In posts from investor communities, opinions like "Google has become the AI kingmaker" and "Ultimately, the company with distribution wins" were prominent. An article on Stocktwits introduced a comment by Dan Ives of Wedbush stating, "Google’s in the driver's seat," symbolizing the reversal of the pessimism that had spread a year ago.



On the other hand, there are also reactions of concern. Elon Musk reportedly commented on this movement, expressing concerns about the concentration of power in Google, which also owns Android and Chrome, highlighting the "risks of winning too much."


The shortest distance from "search to purchase" seen in the Walmart collaboration

Another "win" is the move to transform Gemini into a "shopping venue." Google has announced that it will expand the system to integrate with inventories from Walmart, Shopify, Wayfair, and others within Gemini, allowing the flow from product suggestion to purchase to proceed within the conversation. The aim is to complete checkout (payment) without leaving the conversation, with the rollout starting in the United States.


Walmart's announcement also outlines a vision where Gemini naturally presents Walmart/Sam's Club products within conversations, offering suggestions based on purchase history and cart integration through account linkage. What should be noted here is not just a battle for ad space, but the point that AI shortens the flow of **"intent (want) → discovery → purchase"** itself.


This topic tends to polarize reactions on social media. The bullish camp gets excited with statements like "Commerce is next after search. If Google takes this, they're strong" and "Shopping will be standardized with AI." Meanwhile, the cautious camp warns, "Conversational purchasing might lead to a nightmare of misorders and returns" and "Handling payments and personal data might invite regulation." Indeed, the article also presents views that "agent-based commerce" won't suddenly become widespread and discusses points to avoid excessive automation.


The one who controls the standards wins: The aim of the Universal Commerce Protocol (UCP)

To prevent this commerce expansion from ending as a "one-off partnership," Google has also introduced a standardization framework called the Universal Commerce Protocol (UCP). It is designed to enable AI agents and retail systems to communicate in a common language, connecting discovery to payment and post-purchase support. The Verge also highlights that UCP is open-source, with major payment companies and numerous retailers supporting it.


This topic particularly resonated with "experts" on social media. The reason is simple: when you control the standard, the ecosystem starts to function. In the world of search advertising, the player who controlled the de facto specifications and distribution network was strong. The same structure might be replicated in AI commerce, sparking such associations.


However, standardization also tends to attract the attention of competition authorities. As a flip side to the "supremacy" narrative spoken by the bullish camp, concerns about "being bound by regulations" and "increasing suspicions of monopoly" simultaneously emerge.


The foundation supporting "AI victory": Cloud and in-house chips

AI cannot be sustained by applications alone. It requires massive computing resources, data centers, cloud sales, and the ability to supply in-house chips. Reuters reports that the growth of Google Cloud and the move to offer its self-developed AI chips externally have changed investors' perspectives.


This is where the reality of social media comes in. The bullish camp says, "Ultimately, those who own the infrastructure win." The bearish camp sees "a phase where capital expenditures (CapEx) continue to swell, thinning profits." As stock prices rise, the bar of expectations also rises, so in the next earnings report, the "story of AI" will likely be scrutinized by "backing it up with numbers."


Investor sentiment shifts from "winning with AI" to "earning with AI"

The series of news this time seems to have strengthened the evaluation that Google has not just "caught up in the AI competition" but has started to create multiple pathways to "earn with AI."

  • AI distribution via iPhone (Apple collaboration)

  • Redesigning query and ad value through AI in search

  • Commercialization of Gemini (Walmart, etc.)

  • Monetization through cloud and computing resources (chips/data centers)


The excitement on social media is born the moment these are connected not as "one-offs" but as a "chain." Therefore, with the same intensity as the praise, concerns about monopoly, regulation, and investment burdens are also amplified.



In phases where stock prices are pushed up, the "winner takes all" story becomes stronger. However, in the long term, "the cost of continuing to win" and "the risks of winning too much" inevitably become issues. Alphabet is currently at a stage where it is convincing the market with a "winning strategy" while simultaneously carrying both.


What the market will likely want to see next is probably this kind of answer.
"AI is not just defending search and advertising, but what percentage has it started to occupy as a new revenue pillar?"
And when that number comes out, the atmosphere on social media will shift from excitement to "verification."


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