But what's the endgame? What if Google has the "best" AI offering if most of their revenue that comes from ads is gone?

They'll presumably monetize their AI (more) on both ends: getting you to pay for more access and getting advertisers to pay to be mentioned more often in the outputs. I mean that isn't really a bad position for them if you "using the Internet" degrades into you just sitting there typing queries in their Web app and never going anywhere else.