Google faces a major threat from Sam Altman’s OpenAI while it awaits a decision on how anti-competitive regulators in Washington plan to level the playing playing field in the internet search business.
A ruling in the US on Monday found that Google had established an illegal search monopoly, hailed as a major win for regulators. But the growing number of people using AI tools, including OpenAI’s popular ChatGPT chatbot, is already eroding Google’s dominance, sources, investors and analysts said.
“I think AI is a much bigger deal for Google right now than this decision,” said Arvind Jain, a former Google engineer who worked on products including Search for a decade. “AI is fundamentally changing the way the Search product works.”
Jain, who now runs a venture search firm called Glean, said the impact of AI was immediate compared with the effect of these decisions, which are appealed and take a long time to impact the market.
Google has long been synonymous with search, with a global market share of around 90% and a business that generates annual revenues of around $175 billion. Even Apple, which prefers to manufacture all the software and hardware used in its devices, has allowed Google to be its default search engine for a handsome fee.
But, with many antitrust court cases being resolved even before the deal, the days of preferential treatment for fees are over. In its AI campaign, Apple announced a partnership with OpenAI to bring ChatGPT to its upcoming devices. It emphasized the non-exclusive basis of the deal and talked up the possibility of bringing Google on board as another partner.
Analysts say if Apple is forced to end its search deal with Google, a ruling against Google would accelerate Apple’s move toward AI-powered search services.
Microsoft-backed OpenAI last month said it was also entering the search space with the soft launch of SearchGPT, an AI-powered search engine that provides real-time access to information from across the internet.
SearchGPT
One former senior Google executive predicted, “AI is going to advance faster than the DOJ is taking action against Google. In other words, the entire monopoly will end at the same speed at which AI takes over search.”
Former Google executives and many Wall Street analysts agree that Google has the raw materials it needs to make a big push in AI — a big language model to train its AI and a search engine. But the company’s efforts look scattered in the face of the onslaught of OpenAI, which is attracting younger users.
The popularity of generative AI caught Google by surprise. Despite being the source of the fundamental research behind the technology, it released a consumer product only in early 2023 after ChatGPT became the fastest-growing consumer app.
“The biggest threat to Google may be Google itself — trust is key to adoption of any AI, and its fundamental mistakes with Search Overview showed that Google’s engineers were more focused on rapid releases than on getting things right, as it tried to keep up with the pace of OpenAI and others,” said Rebecca Weightman, CEO and principal analyst at research firm Valoir.
Wateman referred to Google’s AI Overview, a new feature that uses AI to answer search queries that appear before links. It was criticized by publishers after seeing a drop in referral traffic from Google and for making mistakes like telling users to eat glue and saying Barack Obama was a Muslim. Google shut down the feature earlier this year.
DA Davidson analyst Gil Luria believes regulatory scrutiny and the AI threat are intertwined. “(The DOJ) is questioning Google’s business practices because the market is volatile right now and they want to make sure that Google doesn’t continue to expand its current market dominance.”
Richard Socher, founder and CEO of AI search engine startup You.com and former chief scientist at Salesforce, said that while the anti-competition ruling will not have a major impact on Google right now, it will open the way for more players in the search market.
However, he also said it would be “very difficult” to end Google’s dominance in search.
“Nobody has made a big dent in the dominance of Google search yet … we’ll have to see if this will be another domino piece that’s really able to give consumers some more choices, real options.”
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)