CNN
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Shares of Alphabet, Google’s parent company, fell more than 3% in early trading Monday after a report raised concerns that its main search engine could lose market share to AI-powered rivals, including Microsoft’s Bing.
Last month, Google employees learned that Samsung was considering making Bing the default search engine on its devices instead of Google’s search engine, causing a “panic” within the company, according to a New York Times report, citing internal messages and documents. (CNN has not reviewed these documents.)
To cope with the increased competition, Google is reportedly developing a new AI-powered search engine, dubbed “Project Magi,” according to the Times. The company, which reportedly employs about 160 people on the project, aims to change the way results appear in Google Search and will include an AI-powered chat tool to answer questions. The project is expected to be unveiled to the public next month, according to the report.
In a statement sent to CNN, Google spokeswoman Lara Levin said the company has been using AI for years to “improve the quality of our results” and “provide entirely new ways to search,” including a feature rolled out last year that lets users search by combining images and words.
“We acted responsibly and helpfully, while remaining true to our high standards of delivering quality information,” Levin said. “Not every brainstormed idea or product idea results in a launch, but as we’ve said before, we’re excited to bring new AI-powered features to Search, and we’ll share more details soon.”
Samsung did not immediately respond to a request for comment.
Google’s search engine has dominated the market for two decades. But the viral success of ChatGPT, which generates compelling written answers to users’ questions, appears to have put Google on the defensive for the first time in years.
In March, Google began opening up access to Bard, its new AI chatbot tool that directly competes with ChatGPT and promises to help users craft and write essay drafts, plan a friend’s baby shower, and come up with lunch ideas based on what’s in the fridge.
At an event in February, a Google executive also said the company would bring “the magic of generative AI” directly into its core search product and use artificial intelligence to pave the way for “the next frontier of our information products.”
Microsoft, for its part, has invested and partnered with OpenAI, the company behind ChatGPT, to deploy similar technology in Bing and other productivity tools. Other tech companies, including Meta, Baidu, and IBM, as well as a host of startups, are jumping into the race to develop and deploy AI-powered tools.
But tech companies face risks in adopting the technology, which is known to make mistakes and “hallucinate” answers. That’s especially true for search engines, a product many rely on to find accurate, reliable information.
Google was called out after a Bard demonstration provided an inaccurate answer to a question about a telescope. Shares of Google’s parent company, Alphabet, fell 7.7% that day, wiping out $100 billion of its market capitalization.
Microsoft’s Bing AI demo was also criticized for several errors, including an apparent inability to differentiate between types of vacuum cleaners and even fabricated information about some products.
In an interview with 60 Minutes that aired Sunday, Google and Alphabet CEO Sundar Pichai stressed the need for companies to “be responsible every step of the way” when creating and releasing AI tools.
For Google, he said, that means allowing time for “users to get their feedback” and ensuring the company “can develop more robust layers of security before we build, before we deploy more capable models.”
He also expressed his belief that these AI tools will ultimately have vast impacts on businesses, professions and society.
“This is going to impact every product in every company, and that’s why I think this is a very, very profound technology,” he said. “We’re just in the early stages.”
