Shares of Alphabet reportedly fell by as much as 4% when Samsung Electronics Co. announced it was considering replacing Google with Microsoft’s Bing as its default search engine on its devices. This was the firm’s biggest single-day decline in more than two months.
The New York Times reported on Sunday that Google employees had been shocked at the news that the world’s leading smartphone maker was under negotiation, with shares of Alphabet falling rapidly as trading got underway in New York yesterday, while Microsoft was reportedly up by 1.7%.
Bing’s threat to Google
Bing has become an increasing threat to Google Search in the past few months since the launch of OpenAI’s technology, ChatGPT, which provides humanlike responses to user queries. Since its launch, Google has been working frantically on several projects to update and renew its search services and avoid losing out to Bing.
The firm has added artificial intelligence features to its existing service under a project entitled ‘Magi’, with the Times reporting that more than 160 people are currently working on the project.
Google’s Samsung deal
Samsung shipped 261 million smartphones in 2022, according to IDC data, which all run Google’s Android software. The Korean firm has well-established partnerships with both Microsoft and Google, and its devices are bought pre-loaded with a selection of apps and services from both software companies to include popular features such as OneDrive and Google Maps.
With Google’s Samsung deal and its deal with Apple Inc., the company has been valued at roughly $20 billion in annual revenue, with Google currently taking the market share in mobile devices in the US and most of the rest of the world.
Why does this matter?
Despite Google rolling out its own AI technology, Bard, the firm is experiencing lots of teething issues with the software, and as a result, the roll-out is being unveiled at a very cautious pace. This is working perfectly for rivals such as Microsoft who have been working closely with OpenAI to produce ChatGPT. Despite its flaws, the popularity of ChatGPT is phenomenal since its launch in November 2022, reaching one hundred million active users just two months after launch.
Google is going to have to make significant improvements to Bard to be in with a fighting chance of keeping their monopoly over the US and the rest of the world. Yesterday, a report revealed that Google’s CEO, Sundar Pichai, doesn’t even ‘fully understand’ how Bard works after it taught itself a foreign language it was not trained to and cited fake books to solve an economics problem.
With damaging news stories appearing all the time, the future isn’t looking quite so bright for the tech giant.