Google Search faces its toughest challenge after today's announcement from a Microsoft backed firm

Google Search’s domination of the online search market might be challenged as OpenAI announced today a prototype of a search engine called Search GPT. The goal is to integrate SearchGPT with the company’s ChatGPT chatbox. SearchGPT will give consumers “fast and timely answers with clear and relevant sources.” The news has investors in Google parent Alphabet running for the door with the stock down $3.15 or 1.8% to $171.22 in afternoon trading.

Alphabet investors have been worried since ChatGPT was launched in late 2022 that the chatbox could be used to drive a search engine that would compete with Google Search. The latter is the most used online search engine in the world with a 95% share of mobile search worldwide. Google Search does provide users with AI Overview which generates an AI-created response to a search query. The feature, which was launched to a limited group of users in May, was called the biggest change to search in 25 years by Alphabet and Google CEO Sundar Pichai.

Even though Google worked on AI Overview for more than a year, the feature often gives incorrect and inaccurate responses that don’t make sense. Today’s news might be bad for Alphabet and Google, but it is good news for Microsoft which has heavily funded OpenAI. Microsoft’s Bing search platform has a puny .52% share of the mobile search market.

A week ago, OpenAI announced “GPT-4o mini” which is a spinoff from its GPT-40, the fastest and most powerful AI model the company has released. OpenAI has a valuation of $80 billion and is trying to give users a single AI tool where they can generate various types of media created with AI. The goal is to have consumers turn to ChatGPT when they want to create text, audio, images, and video using AI.

Despite the news, which would seem to be positive for Microsoft as a major investor in OpenAI (one estimate says that the software giant has sunk $13 billion into the AI firm), Microsoft shares are down $8.26 or 1.93% to $420.64 this afternoon.

This news is interesting because it might give Google Search competition for the first time since it surpassed Yahoo in 2000. Just two years earlier Yahoo turned down the opportunity to buy Google for $1 billion. The company is now worth $2.14 trillion. The question is whether that valuation will start to go down once SearchGPT is launched worldwide on major platforms.

Source: www.phonearena.com