According to this article which is only interesting for providing the quote from Larry Page, "We have some people at Google [who] are really trying to build artificial intelligence (AI) and to do it on a large scale -- it's not as far off as people think."
While the guy from the link sounds frightened, I'm not so worried about the possible implication of Google's servers suddenly demanding that we gas Kurdistan. I'm primarily just interested in what they will do with the technology. If you have ever used Google AdSense, the program that enables a website owner to advertise in the Google search results, you may have seen the related Keywords feature. This feature does a great job of finding words that are really and truly related, not only syntactically, but also in theme to the search word provided. For example if I tell google that I want to advertise for the phrase, "Space Exploration", they will give me related results like "Space Explorers", "Space blah blah", and "Blah blah Exploration" which is what I would expect from a simple computer program. However they will also give results like "Smi2le", which is Timothy Leary's acronym related to space migration. Google evidently is watching the terms that you search for and checking which pages you actually visit. By comparing the two pieces of data with the content of the site you visit google can build an AI system based around the contextual meaning of words - which in my (not very well educated) opinion is among the most difficult aspects of AI. Seen in this respect google has created a constantly evolving neural network that is edited by millions of real human interactions every day.