Mountain View:Alphabet, the parent company of Google, experienced a significant loss in market value, with a decline of over $500 billion. This sharp drop occurred after the company disclosed that its artificial intelligence (AI) search summaries are affecting its core advertising sales.

According to Anadolu Agency – English, Alphabet's shares decreased by nearly 13%, reaching a six-month low. This reduction in share value brought the company's total market valuation down to $3.46 trillion from the previous $3.97 trillion.

Despite a 25% year-on-year increase in quarterly revenue, totaling $127.6 billion, Alphabet's net profit saw a 25% decline. Additionally, the company faced negative free cash flow, with outflows surpassing $9 billion due to increased investments in AI technology. The implementation of Google's default AI summaries for user search queries has notably reduced advertising sales, which constitute the majority of Alphabet's revenue.

In related developments, Amazon's shares also fell by 6% during after-hours trading. This occurred after the company reported an 11% rise in sales, reaching $201 billion, but also faced negative free cash flow amounting to $42 billion.