Following news that South Korean company Samsung Electronics was considering switching Google’s default search engine on its devices to Microsoft-owned Bing, Alphabet Inc. shares dropped close to 4% on Monday.
An article released by the New York Times over the weekend highlights the mounting threats that Bing, a once-minor competitor who recently gained notoriety after integrating the ChatGPT artificial intelligence technology, poses to Google’s $162 billion per year search engine industry.
According to the story based on internal messages, Google’s response to the danger was “panic”. The Samsung contract brings in $3 billion in annual revenue for the corporation.
According to the article, another $20 billion is comparable to an Apple contract that is due for renewal this year.
With a market share of over 80%, Google has long held a dominant position in the search industry. However, Wall Street worries that Google may be losing ground to Microsoft in the rapidly developing AI race.
Parent company Alphabet’s worth dropped by $100 billion on February 8 because its new chatbot, Bard, sharing false information in a promotional video and a lackluster company event.
In contrast to Alphabet CEO Sundar Pichai’s comments in an interview that was on air on Sunday, who claimed he wanted to avoid a rush to release new artificial intelligence, Google’s drive to compete is evident.
In an interview with CBS’s 60 Minutes, Alphabet CEO Sundar Pichai referred to artificial intelligence as “the most profound technology humanity is working on.” He went on to say that it was “more profound than fire or electricity or anything that we’ve done in the past.”
Google officials explained how to use its Bard A.I. on Sunday’s episode of 60 Minutes.
The demonstration on Sunday, however, also highlighted A.I.’s ongoing battle with ‘hallucinations.’ These are instances where the model generates information that don’t actually exist. James Manyika, a senior vice president at Google, posed the query on CBS. to respond to a query on inflation. The five books suggested by the program didn’t exist, as CBS later discovered.
Pichai disregarded the topic of hallucinations. “The hallucinations issue has not yet been resolved in the field. This is a problem that affects all models,” he told CBS.
After the news about Samsung broke out, the stock dropped to $104.90 on Monday. This effectively erased over $50 billion from Alphabet’s market value. Microsoft, on the other hand, increased 1% more than the overall market.
According to the NYT article, Google is rushing to create a brand-new search engine powered by AI. It will provide a more individualized experience than its present service. And it will receive AI capabilities.