The State of AI Search: Mid-2025 Report

We are halfway through 2025, and the AI search landscape looks dramatically different from where it stood in January. At the start of the year, we published our AI search predictions for 2025. It is time to check the scorecard and look at where we stand.

Here is our mid-year report.

The Big Numbers

Google’s AI Overviews now appear for approximately 45% of all search queries, up from roughly 30% at the start of the year. Google confirmed at I/O 2025 that AI Mode is now the default experience for logged-in users in the US.

ChatGPT has crossed 300 million weekly active users globally. ChatGPT Search has become a legitimate search alternative, handling an estimated 1 billion search-intent queries per month.

Perplexity continues its rapid growth, now serving over 150 million monthly users and processing close to 800 million queries per month. Its business answer engine features have become particularly popular for professional and local search queries.

Gemini is integrated across the entire Google ecosystem, from Search to Maps to Gmail. Monthly active users exceed 200 million.

Bing Copilot has pushed Bing’s overall market share to approximately 6%, up from about 3.5% a year ago.

What We Got Right in January

Looking back at our predictions, here is what played out:

Prediction: AI Overviews would expand beyond 40% of queries. Correct. They hit 45% and Google shows no signs of slowing down.

Prediction: Small businesses with GEO strategies would see measurable AI referral traffic. Correct. Our clients who implemented GEO strategies are seeing 5 to 15% of their total referral traffic coming from AI search platforms.

Prediction: Review signals would become more important for AI recommendations. Correct. Every major AI search platform now heavily weights review data when making local recommendations.

What Surprised Us

The speed of AI agent development. We expected AI agents (tools that can book appointments, compare options, and take action) to be a 2026 story. OpenAI and Google both launched early-stage agent features in Q1 2025. These are not mainstream yet, but they are ahead of schedule.

The resilience of traditional Google search. Despite all the AI growth, Google’s traditional search volume has remained essentially flat. AI search is adding to the total pie, not significantly shrinking Google’s slice (yet).

The rise of AI-first businesses. A new category of businesses has emerged that optimize primarily for AI search rather than Google. These are typically digital-first companies, but the approach is filtering into local business strategy.

Key Trends at Mid-Year

1. The “Dual Optimization” Standard

Six months ago, optimizing for both traditional SEO and AI search (GEO) was a forward-thinking strategy. Now it is the baseline expectation. Businesses that only do traditional SEO are starting to feel the pinch as AI search captures more discovery queries.

We covered the framework for this in our post on GEO vs SEO.

2. Structured Data Is the New Competitive Moat

Businesses with comprehensive schema markup are dramatically outperforming those without it in AI search citations. Structured data has gone from “nice to have” to “essential.”

3. Zero-Click Is the New Normal

With AI Overviews answering queries directly, zero-click searches now account for roughly 65 to 70% of all Google searches. The click-through rate for organic results below an AI Overview has dropped 25 to 40% compared to the same position without an Overview.

But businesses cited within AI Overviews are seeing the opposite effect: higher click-through rates and higher conversion rates from the clicks they do get. Quality over quantity.

4. Local AI Search Is Booming

AI-powered local search has been the surprise growth story of 2025. Google’s AI Local Picks, Perplexity’s local business answers, and ChatGPT’s location-aware search have all matured significantly. For local businesses, this is the biggest opportunity in the current landscape.

5. Content Quality Thresholds Keep Rising

AI search engines are getting pickier about which sources they cite. Thin content, keyword-stuffed pages, and generic filler are increasingly excluded from AI answers. The bar for citation-worthy content keeps rising.

Industry Impact: Who Is Winning, Who Is Losing

Winners:

• Healthcare providers with detailed, structured websites
• Home services businesses with strong review profiles
• Professional services firms with deep content and clear expertise
• Restaurants with complete GBP listings and active review management

Struggling:

• E-commerce businesses competing with AI-powered shopping features
• Content publishers dependent on informational traffic (AI answers their content directly)
• Businesses with outdated websites and minimal online presence

The Second Half Outlook

Here is what we expect for the rest of 2025:

AI Overviews will hit 50% or higher by year-end. The expansion is steady and shows no signs of plateauing.

AI agent-driven local bookings will become a visible trend, especially for restaurants, healthcare, and home services. Businesses with online booking and clear pricing will benefit most.

A new wave of GEO tools will launch, making it easier for small businesses to track and optimize their AI search visibility.

Voice-based AI search will grow as smart speakers, phones, and car systems integrate AI assistants more deeply.

Your Mid-Year Action Items

If you have not started on your GEO strategy yet, here is your priority list for the second half of 2025:

1. Complete your Google Business Profile (if you only do one thing, do this)
2. Add schema markup to your key pages
3. Create detailed FAQ content on your service pages
4. Build a review collection system
5. Track your AI search visibility (check out our tracking guide)
6. Update your content with clear structure and authoritative information

The businesses that act on these items in Q3 will be positioned for a strong Q4 and an excellent start to 2026.

Want a personalized strategy based on where your business stands in the AI search landscape? Contact our team for a mid-year assessment.