Alphabet shares fall on report Samsung may switch search to Bing

By William On Apr 17, 2023

Bing, a small player, has become known for AI technology behind ChatGPT, which poses a real challenge for Google.

Shares of Alphabet Inc fell nearly four percent on Monday after a report that South Korean Samsung Electronics is considering replacing Google with Microsoft-owned Bing as the default search engine on its devices.

The report, published this weekend by the New York Times, highlights the growing challenges facing Google’s $162 billion-a-year search engine business from Bing — a small player that has recently risen to prominence following the integration of its artificial intelligence technology. behind ChatGPT.

Google’s response to the threat was “panic” as the company earns an estimated $3 billion in annual revenue from the Samsung contract, the report said, citing internal messages.

Another $20 billion is tied to a similar Apple contract due for renewal this year, the report said.

Alphabet and Samsung did not immediately respond to Reuters’ requests for comment.

Google has dominated the search market for decades with more than 80 percent share, but Wall Street fears the company could fall behind Microsoft in a fast-moving artificial intelligence (AI) race.

Parent company Alphabet lost $100 billion in value on Feb. 8 after its new chatbot, Bard, shared false information in a promotional video and went unnoticed at a corporate event.

On Monday, the stock fell to $104.90, erasing nearly $50 billion from Alphabet’s market cap. Microsoft, meanwhile, outperformed the broader market with a one percent increase.

“Investors are concerned that Google has become a lazy monopolist in search, and developments in recent months have served as a wake-up call,” said James Cordwell of Atlantic Equities.

Cordwell added that the potential costs associated with making Google Search more competitive than AI-powered Bing could also be a cause for concern.

According to the New York Times report, Google was racing to build an all-new AI-powered search engine that would provide a more personalized experience than the current service, which will also be upgraded with AI features.