Google-parent stock drops on concerns about loss of search market share to AI-driven competitors | CNN Business

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Google parent stock drops on fears it could lose search market


Google’s parent company, Alphabet, witnessed a drop of over 3% in its stock in early Monday trading following a report that raised concerns about the potential loss of market share by its core search engine to competitors using AI technology, such as Microsoft’s Bing.

Recent discussions among Google employees revealed Samsung’s contemplation of switching to Bing as the default search engine on its devices instead of Google’s. This news reportedly caused a stir within Google, as per a New York Times report based on internal communications and documents. (CNN has not independently verified the information.)

To counter this rising competition, Google reportedly started working on a new AI-driven search engine known as Project “Magi.” The project, involving approximately 160 employees, aims to revolutionize Google Search’s result presentation and will incorporate an AI chat tool for answering user queries. The public debut of the project is anticipated next month, according to the report.

In response to inquiries from CNN, Google spokesperson Lara Levin emphasized the company’s long-standing utilization of AI to enhance result quality and introduce innovative search methods, such as the feature introduced last year, allowing users to search via image-text combinations.

Levin stated, “We have been incorporating AI in a responsible and beneficial manner to maintain our high standards in delivering top-notch information. Not all brainstorming sessions or product concepts are launched, but we are enthusiastic about introducing new AI-powered features to Search and will share more information soon.”

Samsung did not immediately respond to requests for comments.

Google has been the dominant force in the search engine realm for around twenty years. However, with the rise of ChatGPT’s popularity, a tool capable of generating engaging written responses to user inputs, Google seems to have adopted a defensive stance for the first time in years.

In March, Google started providing access to Bard, its new AI chatbot tool that competes directly with ChatGPT. Bard offers assistance in outlining and drafting essays, planning events like baby showers, and suggesting meal ideas based on available ingredients.

During a February event, a Google executive mentioned plans to integrate “the magic of generative AI” directly into its core search product, leveraging AI to pioneer the next phase of information products.

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