The Alphabet-owned tech giant confirmed it has been testing fresh ad formats inside Search’s AI Mode, allowing retailers to surface products directly within conversational answers.

Users can now also purchase items from platforms such as Etsy and Wayfair inside Gemini, as Google looks to blur the line between discovery and checkout.

Vidhya Srinivasan, Google’s vice president overseeing ads and commerce, said in a statement: “We aren’t just bringing ads to AI experiences in Search; we are reinventing what an ad is.”

A new tool dubbed “Direct Offers” will allow brands to present discounts directly inside AI-generated responses, while Google is also rolling out a standardised checkout protocol designed to streamline payments and digital identity verification.

The company has partnered with Shopify, Target and Walmart to support the system, which it has said will lay the groundwork for “agentic” commerce - where AI assistants can complete purchases on a user’s behalf.

The move comes as major tech firms race to monetise AI beyond subscriptions.

Industry-wide capital expenditure on AI infrastructure from Google, Amazon, Microsoft and Meta is expected to hit a record $650 billion in 2026, increasing pressure to generate returns.

Google is not alone, as OpenAI has begun testing advertising inside ChatGPT in the U.S., while rivals, including Perplexity, are also pushing AI-driven shopping tools.

However, the expansion into AI commerce is drawing regulatory scrutiny, a U.S. Senator Elizabeth Warren has raised concerns about consumer privacy and the potential for AI systems to nudge users toward higher spending.

Google has previously said it prohibits merchants from listing higher prices on its platforms than on their own websites.