> What I don't understand is how do you square that with google still reporting growth in ads revenues.

Advertiser sees fewer hits from ad campaign, assumes it's their competitors, then raises their budget slightly to better compete in the ad auction.

Multiply that by about 300m businesses.

The signals that Google's customers (the advertisers) get is not "Your ad was ignored after we answer the user's query directly", it's "Your ad was ignored". The advertisers cannot tell why the ad was ignored.

I don't think advertisers are so naive than to not be aware that google now answers many queries with AI.