Shares of Alphabet, Google's parent company, dropped over 3% in early trading on Monday following a report that raised concerns about its search engine potentially losing market share to AI-driven competitors like Microsoft's Bing.
Recently, Google employees were informed that Samsung might switch its default search engine to Bing instead of Google's, causing significant concern within the company, according to a report by the New York Times, which referenced internal communications. In response to the rising competition, Google is reportedly working on a new AI-enhanced search engine project called "Magi." This initiative, involving around 160 team members, aims to transform how search results are presented and will feature an AI chat tool for answering questions. The project is anticipated to be introduced to the public next month.
Google spokesperson Lara Levin stated that the company has long utilized AI to enhance search result quality and offer innovative search methods, such as a feature launched last year that allows users to search using a combination of images and text. Levin emphasized that Google has maintained high standards for delivering quality information and is excited to introduce new AI-driven features to Search, with more details to be shared soon.
Samsung has not yet commented on the matter.
For two decades, Google has led the search engine market. However, the rapid rise of ChatGPT, known for generating impressive written responses, has put Google on the defensive for the first time in years. In March, Google began offering access to Bard, its AI chatbot designed to compete with ChatGPT, which assists users in drafting essays, planning events, and generating meal ideas.
At a February event, a Google executive announced plans to integrate "the magic of generative AI" into its core search product, aiming to advance its information offerings. Meanwhile, Microsoft has invested in and collaborated with OpenAI, the creator of ChatGPT, to incorporate similar technology into Bing and other tools. Other tech giants like Meta, Baidu, and IBM, along with numerous startups, are also racing to develop AI-powered solutions.
However, tech companies face challenges with AI technology, which can make errors and produce inaccurate responses. This is particularly concerning for search engines, which users rely on for precise information. Google faced criticism when a demo of Bard gave an incorrect answer about a telescope, leading to a 7.7% drop in Alphabet's stock, erasing $100 billion in market value. Similarly, Microsoft's Bing AI demo was criticized for several inaccuracies, including confusing vacuum types and fabricating product details.
In a recent interview with 60 Minutes, Sundar Pichai, CEO of Google and Alphabet, emphasized the importance of responsibility in developing and releasing AI tools. He highlighted the need for user feedback and robust safety measures before deploying more advanced models. Pichai also noted that AI tools will significantly impact businesses, professions, and society, describing the technology as transformative and still in its early stages.