Facing the threat of AI extinction, Google Search is being forced to adapt or die. So far, Charles Darwin would be proud.

In its earnings report this week, Google-parent Alphabet revealed that revenue from its ubiquitous search engine continues to grow in spite of widespread fears that search could go the way of the Dodo in an era of generative AI chatbots. Still, the good (if not great) news hardly stirred investors on Thursday following Alphabet’s after-the-bell earnings call a day earlier, with shares rising a muted 0.8%. Indeed, AI is hardly the only extinction-level threat facing the Silicon Valley giant.

Search and Destroy

The supposed cannibalization of traditional search by AI chatbots is difficult to quantify, though by all accounts, AI is still taking more nibbles and small bites than big chomps. A Sensor Tower report released last month found the amount of time internet users spent on traditional search engines fell by 3% from April 2024 to April 2025, while time spent on ChatGPT soared more than 60% in the same frame. Meanwhile, data from market intelligence firm Datos, recently seen by The Wall Street Journal, showed that chatbots accounted for roughly 5.6% of internet searches in June, about double the rate from a year before.

Google’s ability to monetize search is growing anyhow, with revenue climbing 12% year-over-year in the most recent quarter to a record $54.2 billion. And, of course, Google is already integrating AI responses into its search results, with the company saying its “AI Overviews” served 2 billion monthly users in June, up from 1.5 billion in May. Maintaining that growth might be a tricky tightrope:

• On the one hand, recent research from search engine optimization firm BrightEdge has shown that search impressions (i.e., the number of links seen, although not necessarily clicked, by users in search queries) have increased by 49% in the year since Google launched its AI summaries. That means more users are seeing more advertiser links.
• On the other hand, actual clickthrough rates have plummeted 30% in the past AI-infused year, per BrightEdge. That may ultimately change the calculus of advertisers, especially as ascendent AI rivals like Perplexity launch new AI-forward web browsers (meanwhile, those in the content publishing game are getting crushed by the search traffic drop-off).

“Google’s strong Q2 results are definitely a positive signal for the overall search market. We’ve observed a substantial increase in search query volume — driven by a fundamental shift in how people use search,” said Udayan Bose, founder and CEO of NetElixir, a digital growth marketing agency and Google Premier Partner. “This rise in query volume is helping to offset the decline in traditional clickthroughs.”

Heads in the Cloud: Still, AI will be a boon for other parts of Alphabet’s massive empire. Case in point: Its cloud business generated $13.6 billion this past quarter, riding the AI demand boom to a 32% year-over-year growth spurt, helping narrow the lead held by Amazon and Microsoft. Meanwhile, Google’s hard push of Gemini, its own AI model, on enterprise clients is paying off: The AI app now has 450 million monthly active users. So, why the muted market response, even as most individual pieces of the company’s portfolio outperform? Because next month, Google is set to receive remedy orders from a federal judge after being found to have operated illegal monopolies in multiple corners of its business, which may mean the company’s portfolio gets splintered soon. Investors appear to be adapting to this new reality.

America’s largest railroad operator, Union Pacific, confirmed Thursday that it’s in “advanced” talks with rival Norfolk Southern to put a Janney coupler between their operations in the form of a $200 billion coast-to-coast merger.

Not only would a proposed deal have major implications for the freight business, it would present a key test for the Trump administration’s consolidation-friendly rhetoric. Not to mention, other railway owners, including holdings giant Berkshire Hathaway, are already looking to hitch their freight wagons.

Antitrust in US

If Union Pacific and Norfolk Southern can hammer in the spikes of a deal, it will amount to the largest ever railroad buyout. Union Pacific, which dominates the western half of the United States with over 32,000 miles of track west of Chicago, has a $130 billion market capitalization, and Norfolk, with its 19,500-mile network in 22 eastern states, is valued at $62 billion.

It would also create a coast-to-coast rail operator, something that doesn’t exist in the US and which Union Pacific and Norfolk Southern executives have said would be good for business.

And not just theirs: A single-line service across the country would allow for goods from agricultural products to cars to chemicals to move more efficiently without supply chain bottlenecks in Chicago, where necessary carrier handoffs can lead to backlogs and shipping delays that cost companies. But first come the regulatory barricades:

• The last major rail merger was the $31 billion tie-up of Canadian Pacific and Kansas City Southern, resulting in the only single-line rail network that runs through Canada, the US and Mexico. Approval in 2023 came after two years of regulatory scrutiny and opposition from unions and some customers who feared less competition might mean higher freight rates.
• The Surface Transportation Board (STB) under Chairman Patrick Fuchs, a Trump appointee tapped in January, has suggested it will move faster when assessing consolidation and focus on enforcing any conditions once deals are completed. Union Pacific, meanwhile, was clear that the merger talks could be derailed well before they reach the regulator.

Union Pacific reported its second-quarter earnings Thursday, with sales up 2% year-over-year to $6.1 billion, in line with Wall Street’s expectations. But its shares tumbled 4.5% due to the merger news: As the likely acquirer of the smaller Norfolk Southern, it would have to pay a premium on Norfolk’s shares. While Class I railway mergers are rare, with Canadian Pacific-Kansas City being the only one since 2001, they’ve been good for bottom lines. Union Pacific, for example, is the product of multiple mergers in the 1990s and has seen its operating profit margin rise over time to roughly 40%, from less than 30% in 2010.

Buffett of Options: Earlier this week, Berkshire Hathaway CEO Warren Buffett denied that BNSF Railway, which is owned by his conglomerate, hired Goldman Sachs to advise it about potential mergers. But that train may have left the station: CNBC reported Thursday that BNSF and rival CSX are exploring merger options, while the STB has already begun preliminary work in anticipation of not one, but two, merger proposals.

Count American Airlines among the humans opposing a robot takeover. At least when it comes to pricing tickets.

On Thursday, CEO ​​Robert Isom told analysts after the company’s earnings call that he opposed using artificial intelligence for so-called “personalized pricing” of individual customers’ air fares, calling the tactic a “bait and switch.” That sets American apart from competitor Delta Air Lines, which last week enthusiastically embraced the tech as a future pillar of the company.

AI Takes Flight

Delta’s AI pricing plans aren’t just plans — they’re already here. In its earnings call earlier this month, Delta said that about 3% of domestic tickets sold this year have been priced using AI technology provided by Fetchr, an AI pricing firm. That’s up from about 1% of tickets sold last year, and a stepping stone to a 20% share the airline hopes to hit by the end of the year. Eventually, Delta plans to use AI to price 100% of its tickets.

The 1% pilot program already produced “amazingly favorable” results, President Glen Hauenstein reportedly told investors during a November meeting last year, according to a recent Fortune investigation. Unsurprisingly, skeptics want a look under the hood:

• Earlier this week, a trio of US senators pressed Delta CEO Ed Bastian to answer questions about the airline’s pricing strategy, flagging concerns over privacy and the potential for price gouging, and inquiring about the personal data Delta uses to set prices.
• In a December report providing a broad overview of the impacts of personalized AI pricing across industries, the aptly named consumer watchdog group Consumer Watchdog found that “the wealthier a person is, the less they’re likely to pay, and vice versa. A lower credit score means higher prices offered to consumers of many products.”

Delta has pushed back. “There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise,” the airline said in a statement earlier this week.

2025 Turbulence: Delta’s AI hype party was meant as a cherry on top of a positive earnings sundae. The airline reported a 63% profit jump and forecasted stabilizing demand, sending its shares soaring immediately afterward. American, on the other hand, saw its share price tumble 10% Thursday after it lagged profit expectations in the most recent quarter and reinstated its 2025 forecast with a much lower outlook than at the beginning of the year.