With AI devouring the world, Google at its I/O conference this year didn’t merely introduce new features, it introduced a $249.99 per-month subscription like it was selling a gym membership. While OpenAI, Anthropic, and other startups are grasping at its crown for search engines, Google is making the world see that it’s not going to retire early. Google began its annual I/O developer conference Tuesday with a bold move to reinstate leadership in the AI race.

From rolling out a $249.99 premium subscription to launching AI-driven search features for U.S consumers, the technology giant is gambling big on artificial intelligence, not only as a trend, but as its next economic driver.

AI Mode Arrives in Search

Google officially announced that its tested “AI Mode” for Search is live and available with users across the United States. The new feature removes the standard link-based search format and rather brings in the AI generated answers specific to complex queries. It is one of the company’s most dramatic deviations from its original product since the early days.

Google highlights that the feature, introduced in March as a preview, is meant to manage subtle, multi-step queries. Currently, AI Mode is optional, but the company’s action indicates an era in which AI-enabled responses become the default for surfing the web.

Google’s AI Aspirations Grow with Gemini and Project Astra

Alphabet CEO Sundar Pichai said at the conference,

“Over and over, we’ve been able to deliver the best models at the most effective price point.”

CEO Sundar Pichai also announced that the company’s AI assistant app, Gemini, now has over 400 million monthly active users. Gemini will soon be augmented with support from “Project Astra,” a cutting-edge AI agent that can take real-time input from smartphone cameras and help users answer a broad set of visual and document-based questions.

The firm also previewed new Gmail (AI-generated email answers), Google Meet (English–Spanish translation), and its futuristic “Google Beam”, a hardware through which a video chat feels so real that it makes the user feel like the meeting is taking place in person. It is created in partnership with HP and upon Google’s immersive Project Starline technology.

$249.99 Ultra AI Plan

Though most of the announcements centered on general AI availability, Google did roll out a premium “AI Ultra Plan” for $249.99 per month. The subscription includes features that allow increased limits for Gemini usage, pre-access to testing tools such as Project Mariner (an automation assistant for the browser) and Deep Think, a premium version of its Gemini model aimed at reasoning-intensive tasks. Subscribers also get 30 terabytes of cloud storage and ad-free YouTube, bringing Google’s prices into alignment with rival pro-tier options from OpenAI and Anthropic.

The Ultra plan is an add on Google’s current tiered cloud and AI subscriptions, which already have more than 150 million users. A $19.99 per month plan provides restricted access to advanced AI features, while lower-cost plans are mainly focused on additional cloud storage. Google is making more use of its subscription base to fund AI innovation as development expenses keep growing throughout the industry.

Google under Pressure

Even with its aggressive AI rollout, Google’s search empire continues to be under pressure. Only weeks ago, Alphabet lost $150 billion in market capitalization after an Apple executive gave testimony that AI software had led to a decrease in Safari-based Google searches. Also, Alphabet shares were down 1.3% at $165.73 on Tuesday.

Analysts are starting to reconsider Google’s search market share. Bernstein now puts it at 65% to 70%, far lower than the historic 90%, after accounting for usage of AI chatbots. Wells Fargo predicts a possible drop below 50% in the next five years if current behavioral patterns continue.

Ads, Uncertainty and Capital Spending Surges

Google is testing advertisements within AI Overviews, its new AI-driven summaries on top of search results. The company claims that AI could make for more “hyper-relevant” ads, but executives have thus far avoided significant disruptions to its $350 billion search ad business.

On the other hand, the Legal fights hang on the horizon as well. The U.S Justice Department is pushing two antitrust lawsuits, one of which has the potential to compel Alphabet to sell significant assets such as the Chrome browser.

Alphabet will spend $75 billion on capital investments this year, a steep increase from $52.5 billion in 2024. Pichai also reaffirmed the plans in the face of worldwide economic turbulence, including fresh U.S tariffs on Chinese imports.

Google Bets Its Future on AI

Google’s announcements are both confident and cautious. Google is aggressively injecting AI into its entire product stack, but it’s doing this while attempting to shield a heritage business under mounting pressure. With fresh AI-based tools, high-end pricing strategies, and trial capabilities like Astra and Deep Think, Google is racing to gain leadership in a market it dominated by default. The search giant is no longer merely enhancing links, rather it’s optimizing survival.