Alphabet Shares Fall Amid Concerns That OpenAI May Compete in Search – Crypto News – Crypto News
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Alphabet Shares Fall Amid Concerns That OpenAI May Compete in Search Alphabet Shares Fall Amid Concerns That OpenAI May Compete in Search

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Alphabet Shares Fall Amid Concerns That OpenAI May Compete in Search – Crypto News

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Alphabet, the parent company of Google, experienced a decline in its shares Thursday (Feb. 15) following a report that OpenAI, the owner of ChatGPT, is developing a web search product that would directly compete with Google.

OpenAI’s search service would be partially powered by Microsoft’s Bing search engine, Bloomberg reported, citing a paywalled article by The Information.

This report raised concerns about the potential risks to Google’s search business, which generates the majority of Alphabet’s revenue through digital advertising sales, the Bloomberg report said.

The report of OpenAI’s entry into the search market resulted in Alphabet’s stock falling by as much as 3.8% on Thursday, according to the report.

While this underperformance highlights concerns about the potential impact of rival artificial intelligence (AI) services on Google’s dominance in the search industry, analysts believe that the risk to Alphabet from an OpenAI search product is relatively modest, the report said.

Colin Sebastian, an analyst at Baird, told Bloomberg that creating a viable competitor in the search space is extremely challenging, and Google has successfully fended off many competitors over the years with the quality of its search results. Sebastian also noted that alternative search engines would likely need to be better than Google to truly shift user behavior, which could be a challenge even for OpenAI, per the report.

Microsoft has invested billions of dollars in OpenAI and has incorporated ChatGPT features into Bing. Despite these efforts, Microsoft has struggled to gain significant market share in the search industry, the report said.

It was reported in January that the addition of ChatGPT has not helped Bing take on Google. Bing ended 2023 with just 3.4% of the worldwide search market, while Google took a 91.6% share, Bloomberg News reported Jan. 18, citing data analytics company StatCounter.

In April, shortly after ChatGPT became a viral sensation and jump-started interest in AI, it was reported that Google was building an all-new search engine amid increased competition from AI-driven rivals.

Reached for comment by PYMNTS at the time of that report, a Google spokesperson said the company had been bringing AI to its search product for years.

See More In: AI, Alphabet, artificial intelligence, ChatGPT, Google, Microsoft, News, OpenAI, PYMNTS News, search engines, stock market, What’s Hot

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