Google-parent Stock Drops On Fears It Could Lose Search Market Share To AI-powered Rivals


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Google-parent stock drops on fears it could lose search market share to AI-powered rivals

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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 main 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 its devices instead of Google’s search engine, sparking “panic” within the company. report from the New York Times, citing internal reports and documents. (CNN did not review the material.)

Google is developing a new artificial intelligence-powered search engine called Project Magi in an effort to keep up with increased competition, the Times reports. The company, which reportedly has about 160 people working on the project, is looking to change the way Google search results are displayed and will include an artificial intelligence chat tool available to answer questions. According to the report, the project will be presented to the public next month.


In a statement sent to CNN, Google spokesperson Lara Levin said the company has been using AI for years to “improve the quality of our results” and “offer completely new ways to search,” including with a feature rolled out last year that allows users to search by combining images and words.

“We have done this responsibly and helpfully while maintaining the high bar we have set for delivering quality information,” Levin said. “Not every brainstorming deck or product idea leads to a launch, but as we’ve said before, we’re excited to introduce new AI-powered features in Search and will share more details soon.”

Samsung did not immediately respond to a request for comment.

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


In March, Google began making available Bard, its new AI chatbot tool that competes directly with ChatGPT and promises to help users sketch and draft essays, plan a kid’s party, and get lunch ideas based on what’s available. in a refrigerator.

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

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

But tech companies face risks when using this technology, which is known to make mistakes and cause “hallucinations.” This is especially true when it comes to search engines, a product that many use to find accurate and reliable information.


Google was pulled after a demo of Bard gave an inaccurate answer to a question about the telescope. Shares in Google’s parent company Alphabet fell 7.7% that day, wiping out $100 billion in market value.

The Microsoft Bing AI demo was also caused by several bugs, including an apparent inability to distinguish between vacuum cleaner types and even made-up information about certain products.

IN interview program 60 minutes which aired on Sunday, Google and Alphabet CEO Sundar Pichai stressed that companies must “be held accountable every step of the way” as they build and release AI tools.

For Google, he says, this means allowing time for “user feedback” and ensuring that the company “can develop stronger levels of security before we build, before we roll out better models.”

He also expressed his confidence that these AI tools will eventually have a broad impact on business, professions and society.

“This will affect every product in every company, so I think it’s a very, very deep technology,” he said. “So, we’re only in the early days.”


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