Shares of Alphabet, the parent company of Google, dropped over 3% in early trading on Monday, following concerns that its dominant search engine might lose ground to AI-driven competitors like Microsoft’s Bing. This decline reflects growing anxiety within the tech giant as it faces increased competition in the rapidly evolving landscape of artificial intelligence.
Recent reports revealed that Samsung is considering making Bing the default search engine on its devices instead of Google, which has triggered a wave of concern among Google employees. Internal communications described a state of "panic" as the company grapples with the potential loss of a significant partnership.
In response to the intensifying competition, Google is reportedly working on an AI-enhanced search engine known as Project “Magi.” This initiative, involving approximately 160 employees, aims to alter how search results are displayed and will incorporate an AI chat tool designed to answer user queries. The project is expected to be publicly unveiled next month.
Google spokesperson Lara Levin emphasized that the company has long integrated AI to enhance search quality and introduce innovative search methods. She pointed to features rolled out last year that allow users to search using a combination of images and words. Levin assured that Google approaches AI development responsibly, maintaining a commitment to delivering high-quality information.
The competitive landscape has shifted dramatically, with Google’s search engine, which has dominated for two decades, now facing challenges from AI technologies like ChatGPT. The success of such tools has forced Google into a defensive position for the first time in years. In March, Google began granting access to Bard, its own AI chatbot, which competes directly with ChatGPT and offers users assistance with various tasks, from drafting essays to meal planning.
Meanwhile, Microsoft has strengthened its position by investing in and partnering with OpenAI, the organization behind ChatGPT, to integrate similar AI capabilities into Bing and other products. This collaboration has intensified the race among tech companies, including Meta, Baidu, and IBM, to develop and implement AI-powered tools.
However, the integration of AI into search engines is not without risks. Both Google and Microsoft have faced scrutiny for inaccuracies in their AI systems, which can produce misleading or erroneous information. Google experienced a significant drop in its stock value earlier this year after Bard provided an incorrect answer during a demonstration, resulting in a loss of approximately $100 billion in market capitalization.
In a recent interview, Sundar Pichai, CEO of Google and Alphabet, highlighted the importance of responsible AI development. He stressed the necessity of incorporating user feedback and ensuring robust safety measures before launching advanced AI models. Pichai believes that AI will profoundly impact various industries and society as a whole, marking the beginning of a new era in technology.
As Google prepares to unveil its AI-driven search enhancements, the company faces a critical juncture in its history, vying to maintain its market leadership amid a surge of innovative competitors.