Alphabet Shares Fall as Samsung Plans to Ditch Google for AI-powered Bing

Alphabet Shares Fall as Samsung Plans to Ditch Google for AI-powered Bing

Samsung is reportedly planning to replace Google with Microsoft’s new AI-powered Bing as the default search engine on its devices. Shares of Alphabet Inc., owners of Google, fell more than 4% after the news.

Bing has attracted much attention since it was integrated with OpenAI’s popular AI chatbot ChatGPT earlier this year, while Google is still trying to catch up.

According to a New York Times report, Google executives reacted to the Samsung threat with “shock and panic”. The California-based tech giant reportedly earns around $3 billion in annual revenue from the Samsung contract.

The contract places Google as the default search engine on Samsung’s mobile gadgets. Additionally, there is an estimated $20 billion connected to a comparable Apple contract that is up for renewal this year.

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Alphabet shares tank 4%

Shares of Alphabet Inc., the parent company of Google, fell by as much as 4% to $104.90 in New York Stock Exchange trading on Monday, a day after the report. The decline wiped more than $50 billion from Alphabet’s total market capitalization of over $1.34 trillion.

Alphabet Shares Fall as Samsung Plans to Ditch Google for AI-powered Bing
Alphabet Inc. share price

As of writing, the stock price was 1.3% lower at $105.08. Over the past year, Alphabet has touched a high of $131.92 and low of $83.45, according to Yahoo Finance. By comparison, Microsoft shares rose by about 1% on Monday, before paring those gains on Tuesday.

Google has long been the dominant player in the search engine market, raking in about $162 billion in earnings from the business last year. The company controls over 90% of the online search business. However, Samsung is betting that Bing’s artificial intelligence capabilities will give it an edge over its competitors.

And as AI becomes increasingly important in the tech sector, this move could help position Samsung as a leader in the industry, reports say. The decision to switch to Bing could also mark a major turning point in the relationship between Samsung and Google.

In recent years, the two companies have collaborated on a number of projects, with Google providing key software components for many of Samsung’s devices. For example, Samsung’s smartphones are built using Google’s Android operating system.

It would appear though, Samsung is now looking to diversify its partnerships and explore new opportunities in the tech industry. If Samsung switched to Bing, it wouldn’t be the first time. In 2010 some models of the Galaxy S II shipped with Bing as the only search engine.

Panicky Google reacts

In January, Microsoft integrated the artificial intelligence technology behind ChatGPT into its product. A few weeks later, Google debuted its own rival chatbot called Bard, which basically underwhelmed the market.

Per the The New York Times report, Google is rapidly developing an all-new search engine turbocharged by AI, which will offer users a more personalized experience than its current service – all part of a grand project codenamed “Magi”.

It is also upgrading the existing search with AI features, according to internal documents reviewed by paper. The report describes a new, more “predictive” search engine that “would learn what users want to know based on what they’re searching when they begin using it.”

Unlike Google Assistant, this new version of a Google chatbot would have ads and, perhaps, the possibility to even make money. Bard “does not have ads and is not part of Google search at this time.”

Google spokesperson Lara Levin, was quoted saying that:

“Not every brainstorm deck or product idea leads to a launch, but as we’ve said before, we’re excited about bringing new A.I.-powered features to search, and will share more details soon.”

As part of project Magi, Google is reportedly planning to integrate AI with Google Earth; a so-called “GIFI” tool that can generate images in Google Image search results; and yet another would help users search for music with a chatbot.

“Tivoli Tutor” would teach users a new language and “Searchalong” is a proposed Chrome extension that would integrate a chatbot in Chrome.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.