Alphabet shares fall on report Samsung may switch search to Bing | Business and Economy News
Bing, a minor player, has risen to prominence with AI tech behind ChatGPT, posing a real challenge to Google.
Alphabet Inc shares fell nearly four percent on Monday after a report that South Korea’s Samsung Electronics was considering replacing Google with Microsoft-owned Bing as the default search engine on its devices.
The report, published by the New York Times over the weekend, underscores the growing challenges that Google’s $162bn-a-year search engine business face from Bing – a minor player that has risen in prominence recently after the integration of the artificial intelligence tech behind ChatGPT.
Google’s reaction to the threat was “panic” as the company earns an estimated $3bn in annual revenue from the Samsung contract, the report said, citing internal messages.
Another $20bn is tied to a similar Apple contract that will be up for renewal this year, the report added.
Alphabet and Samsung did not immediately respond to Reuters’ requests for comment.
Google has for decades dominated the search market with a share of over 80 percent, but Wall Street fears the company could be falling behind Microsoft in a fast-moving artificial intelligence (AI) race.
Parent firm Alphabet lost $100bn in value on February 8 after its new chatbot, Bard, shared inaccurate information in a promotional video and a company event failed to dazzle.
On Monday, the stock fell to $104.90 and erased nearly $50bn from Alphabet’s market capitalization. Microsoft, meanwhile, outperformed the broader market with a rise of one percent.
“Investors worry Google has become a lazy monopolist in search, and the developments of the last couple of months have served as a wake-up call,” Atlantic Equities analyst James Cordwell said.
Cordwell added that the potential costs tied to making Google Search more competitive than AI-powered Bing could also be a cause of concern.
The New York Times report said Google was racing to build an all-new AI-powered search engine that would offer a more personalised experience than its current service, which is also set to be upgraded with AI features.
