Alphabet shares fall on report that Samsung may switch search to Bing

Bing, a minor player, has risen to prominence with the AI ​​technology behind ChatGPT, presenting a real challenge for Google.

Alphabet Inc shares fell nearly 4 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 facing Google’s $162 billion-a-year search engine business from Bing, a minor player that has grown in importance recently after of the integration of artificial intelligence technology behind. ChatGPT.

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

Another $20 billion is tied to a similar Apple contract set to be renewed this year, the report added.

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

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

mother company Alphabet lost $100 billion in value on February 8 after his new chatbot, Bard, shared inaccurate information in a promotional video and a company event failed to impress.

On Monday, the shares fell to $104.90 and wiped nearly $50 billion of Alphabet’s market capitalization. Meanwhile, Microsoft outperformed the broader market with an increase of one percent.

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

Cordwell added that the potential costs tied to making Google Search more competitive than AI-powered Bing could also be a concern.

The New York Times report said Google was racing to build a new AI-powered search engine that would offer a more personalized experience than its current service, which will also be updated with AI features.