Google-parent stock drops on fears it could lose search market share to AI-powered rivals
Alphabet's shares fall after a report suggests its core search engine could lose market share to rivals powered by AI.
Alphabet, the parent company of Google, saw its shares fall more than 3% on Monday morning after a report raised concerns that Alphabet's core search engine might lose market share to AI rivals such as Microsoft's Bing.
According to the New York Times report, which cites internal documents and messages, Google employees were shocked last month when they learned that Samsung considered making Bing their default search engine for its devices, instead of Google. This triggered a panic within the company. CNN has not reviewed this material.
According to The Times, Google has been working on a new AI powered search engine named Project 'Magi' to combat the increased competition. According to the Times, Google, which has 160 employees working on this project, wants to change how results are displayed in Google Search. It will also include a chatbot that uses AI to answer questions. According to the report, the project will be revealed to the public in the next month.
Google spokesperson Lara Levin told CNN that the company uses AI to improve the quality of its results and to "offer completely new ways to search", including a feature launched last year which allows users to search using images and words.
Levin stated that the company had done this in a way which was responsible and helpful, while maintaining its high standards for providing quality information. Not every product or brainstorming deck leads to a release, but we are excited to bring new AI-powered Search features, and we will be sharing more details shortly.
Google's search engine dominates the market since two decades. The viral success of ChatGPT - which generates compelling written responses based on user prompts - appeared to have put Google in defense for the very first time since years.
Google launched Bard in March. This new AI chatbot is a direct competitor to ChatGPT. It promises to help you outline an essay, write a draft, plan your friend's shower and find lunch ideas by looking at what's on the fridge.
A Google executive said at an event held in February that the company would bring 'the magical of generative AI directly into its core product' and use artificial to pave way for the "next frontier of information products."
Microsoft has partnered and invested with OpenAI (the company behind ChatGPT) to implement similar technology into Bing and other productivity software. Meta, Baidu, IBM and other tech companies are also racing to create and deploy AI-powered products.
Tech companies are at risk of embracing this technology that is known to make errors and "hallucinate" responses. This is especially true with search engines. Many people use them to find reliable and accurate information.
Google was called out for an incorrect answer to a question regarding a telescope in a Bard demo. Alphabet, the parent company of Google, saw its shares fall 7.7% on that day. This wiped $100 billion from its market value.
Microsoft's Bing AI Demo was also criticized for several errors. These included an apparent failure to distinguish between vacuum types and even made-up information about certain products.
Sundar Pichai, the CEO of Alphabet and Google, spoke to 60 Minutes on Sunday and stressed that companies must 'be accountable in every step along the journey' when they develop and release AI tools.
Google's Mr. Schmidt said that this means giving time to 'user feedback', and ensuring the company can 'develop more robust safety layers' before building, before deploying more capable models.
He also stated that he believes these AI tools will have a broad impact on business, professions and the society.
He said: 'This will impact every product in every company. That's why, I think this is a very, profound technology.' "We are still in the early stages."