17 April (Reuters) Following news that South Korean company Samsung Electronics (005930.KS) was considering switching Google’s position as the default search engine on its smartphones to Microsoft-owned (MSFT.O) Bing, Alphabet Inc (GOOGL.O) shares dropped as much as 4% on Monday.
The article, which was released by the New York Times over the weekend, highlights the mounting threats that Bing, a once-minor competitor who recently gained notoriety by integrating the ChatGPT artificial intelligence technology, poses to Google’s $162 billion per year search engine industry.
According to the story, which was based on internal correspondence, Google’s response to the danger was “panic” because the Samsung deal is said to bring in $3 billion in yearly income for the corporation. According to the article, another $20 billion is connected to a comparable Apple (AAPL.O) deal that is due for renewal this year.
In response to Reuters, Google stated that it was striving to provide new AI-powered Search capabilities while remaining silent over its partnership with Samsung. A request for comment was not answered by the major South Korean manufacturer of consumer electronics.
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 as a result of its new chatbot, Bard, sharing false information in a promotional video and a lackluster corporate event.
The stock dropped to $104.90 on Monday, erasing over $50 billion from Alphabet’s market value. Microsoft, on the other hand, increased 1% more than the whole market.
Investors fear that Google has turned into a lax monopolist in search, and the recent happenings have acted as a wake-up call, according to James Cordwell, an Atlantic Equities analyst.
The expenditures involved in making Google Search more competitive than Bing, which is driven by AI, might also be a problem, according to Cordwell. On Monday, Alphabet stock declined 2.7% to close at $105.9.
