Google faces challenge from Microsoft's Bing as AI-powered search gains prominence

As Microsoft's Bing integrates AI tech behind ChatGPT, Google faces a real challenge from this rising player in the search engine market.

Google faces challenge from Microsoft's Bing as AI-powered search gains prominence

Google is facing challenges from Microsoft-owned Bing as the default search engine on Samsung devices, according to a report by the New York Times. The report highlighted that Alphabet's Google earns an estimated $3bn in annual revenue from the Samsung contract and another $20bn is tied to a similar Apple contract that will be up for renewal this year. Google's response was "panic", the report said, citing internal messages. Google has dominated the search market for decades with a share of over 80%, but Wall Street fears the company could be falling behind Microsoft in a fast-moving artificial intelligence (AI) race.

The report underscores the growing challenge that Google's $162bn-a-year search engine business faces from Bing, which has risen in prominence recently after integrating the artificial intelligence tech behind ChatGPT. The potential costs tied to making Google Search more competitive than AI-powered Bing could also be a cause of concern. Google is reportedly racing to build an all-new AI-powered search engine that would offer a more personalized experience than its current service, which is also set to be upgraded with AI features.

Google's parent firm Alphabet lost $100bn in value on February 8 after its new chatbot, Bard, shared inaccurate information in a promotional video, and a company event failed to dazzle. On Monday, Alphabet's shares fell nearly 4% to $104.90 and erased nearly $50bn from its market capitalization. Meanwhile, Microsoft outperformed the broader market with a rise of 1%.

"Investors worry Google has become a lazy monopolist in search, and the developments of the last couple of months have served as a wake-up call," said Atlantic Equities analyst James Cordwell.

The battle between Google and Microsoft is shaping up to be one of the most significant battles in the tech world. Both companies are investing heavily in AI and machine learning, and both are looking to use these technologies to transform search. Google has long been the dominant player in search, but Microsoft is hoping to change that with Bing, which has made significant gains in market share in recent years.

Google is not the only tech giant facing challenges. Apple's recent earnings report showed that iPhone sales were down 9% year-on-year, while Samsung's smartphone sales are also under pressure. These challenges come at a time when the tech industry is facing increased scrutiny over data privacy and security concerns.

The battle between Google and Microsoft is likely to intensify in the coming months, as both companies look to establish dominance in the AI-powered search space. While Google has the advantage of years of dominance in the search market, Microsoft is rapidly catching up, thanks to the integration of ChatGPT into Bing.

As the tech industry continues to evolve, it is clear that AI and machine learning will play a central role in shaping the future of search. Companies like Google and Microsoft are investing heavily in these technologies, as they look to transform search and gain an edge over their rivals. The battle for dominance in the AI-powered search space is just beginning, and it is shaping up to be one of the most significant battles in the tech world.

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