Thread by @ChrisCamillo

1/11 🧵 THREAD: Google’s reported search query growth may be AI-driven, not human.

2/11 Evidence is piling up that people using AI queries through ChatGPT are generating Google searches and clicks at scale. That can mask slowing human search activity while still printing "growth."

3/11 Example: Apple’s Eddy Cue testified Safari searches fell for the first time in 22 years because of AI use. Alphabet stock dropped ~9% that day.

4/11 Google’s response: “We continue to see overall query growth in Search.” Q2 showed $54.2B in Search revenue, +12% YoY. But this came right after Apple testified that human searches are falling. How is that possible?

5/11 Let’s talk about Google Trends. Investors treat it as a clean read on relative search volume, but recently when stacked against other signals, the picture doesn’t line up. Lululemon product terms (leggings, bras, tops, shorts, joggers, bags) are spiking this summer to holiday-level highs. In nearly two decades analyzing Google Trends data, I’ve never seen a mature brand’s products broadly spike like this outside peak seasonality. Implausible given that card swipes, web traffic, app engagement, and store traffic show only modest improvement. And it’s not just Lululemon…

6/11 Others are noticing this too: social arb investors are flagging Google Trend anomalies across numerous brands and keywords this summer.

7/11 I suspected AI might be driving these odd patterns, so I ran a micro test. Phrase “organic abercrombie socks” had 0 search history as it’s a made-up product category. After a handful of ChatGPT prompts, it showed up in Trends within 24h. Trends docs say Google filters out its own AI searches, but make no mention of external AIs like ChatGPT. The socks test suggests AI traffic leaks through.

8/11 An AI app developer I spoke with explained that a single AI research request can spawn hundreds of Google queries and clicks. This dynamic could inflate "query growth" even if human searches are slowing.

9/11 Now, Google Ads. This is where the money is made, and where policy clarity matters. Google says you don’t pay for invalid clicks but isn’t it suspicious that their Adwords policy does not mention clicks from AI apps or chatbots? If AI traffic is interacting with ads, advertisers may be paying for it without knowing the true value of that AI engagement.

10/11 Why it matters: advertisers could be unknowingly paying for AI traffic. Investors and analysts leaning on Google Trends data may be misled. And Google’s stock at all-time highs could be partly built on revenue from query growth that isn’t human. If Google is pushed to disclose and bill separately for AI vs human queries, expect volatility.

11/11 If you’re seeing AI-generated search traffic or Google Trends anomalies, reply with receipts. If I’m missing something or misinterpreting, push back. Disclosure: Short $GOOGL, seeking truth and transparency in Google’s policies and disclosures.