Shares of parent company Google fall on fears it could lose search market share to AI-powered rivals

CNN
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Shares of Alphabet, Google’s parent company, fell more than 3% in early trading on Monday after a report raised concerns that its core search engine could lose market share to AI-powered competitors, including Microsoft’s Bing.

Last month, Google employees learned that Samsung was considering making Bing the default search engine on their devices instead of Google’s search engine, causing “panic” within the company. according to a report. report from the New York Times, citing internal messages and documents. (CNN has not reviewed the document.)

In an effort to tackle the growing competition, Google is reportedly developing a new AI-based search engine called Project “Magi,” according to the Times. The company is said to have around 160 people working on a project that aims to change the way results appear in Google Search and will include an AI chat engine available to answer questions. The project is expected to be announced next month, according to the report.

In a statement sent to CNN, Google spokeswoman Lara Levin said the company has been using AI for years to “improve the quality of our results” and “provide entirely new ways of searching.” , including a feature. released last year allows users to search by combining images and words.

“We did so in a responsible and helpful manner in order to maintain the high standards we set for providing quality information,” Levin said. “Not every product idea or brainstorm leads to a launch, but as we’ve said before, we’re excited about bringing new AI-powered features to Search and will Will share more details soon.”

Samsung did not immediately respond to a request for comment.

Google’s search engine has dominated the market for two decades. But the viral success of ChatGPT, which can generate compelling text responses to user prompts, seems to have put Google on the defensive for the first time in years.

In March, Google began opening access to Bard, a new AI chatbot tool that competes directly with ChatGPT and promises to help users draft and draft essays, plan a friend’s shower, and get Lunch ideas based on what’s in the fridge.

At an event in February, a Google executive also said the company will bring “the magic of artificial intelligence AI” directly into its core search product and use artificial intelligence to pave the way for the “next frontier of our information products.” I”.

Meanwhile, Microsoft has invested in and partnered with OpenAI, the company behind ChatGPT, to implement the same technology in Bing and other productivity tools. Other tech companies, including Meta, Baidu and IBM, as well as a host of startups, are racing to develop and deploy AI-powered tools.

But tech companies face risks when it comes to embracing this technology, known as mistakes and the “hallucination” response. That’s especially true when it comes to search engines, a product that many people use to find accurate and reliable information.

Google is call out after Bard’s demo gave an incorrect answer to the telescope question. Shares of Google’s parent company Alphabet fell 7.7% that day, taking away $100 billion of its market value.

Microsoft’s Bing AI Demo Is Also Called some errorsincluding the inability to clearly distinguish between different types of vacuum cleaners and even fabricated information about some products.

IN an interview with 60 Minutes Aired on Sunday, Google and Alphabet CEO Sundar Pichai emphasized the need for companies to “take responsibility every step of the way” as they build and release AI tools. .

For Google, he said, that means taking time for “user feedback” and making sure the company “can develop stronger layers of security before we build, before we deploy more capable models.”

He also expressed his belief that these AI tools will eventually have a broad impact on businesses, industries and society.

“This is going to impact every product for every company, and that’s why I think it’s a very, very profound technology,” he said. “And so, we are only in the early days.”