Alphabet Down 3% in Premarket After Reports of Samsung Ditching Google for Bing

After 12 years, Samsung could replace Google as the default search engine on its devices, pushing the tech company’s shares down over 3% in the premarket. According to New York Times, the world’s biggest smartphone maker was considering switching to Bing, Microsoft’s search engine that recently implemented new artificial intelligence (AI) features.

Google in “Panic” Amid Samsung-Bing Rumors

Shares of Google’s parent company, Alphabet, are down more than 3% premarket at the time of writing following the New York Times report that Samsung was considering replacing Google as the default search engine on its electronic devices with Microsoft’s Bing. Microsoft’s stock was up over 1.5% in the premarket.

The move would place at risk around $3 billion in annual revenue for Google, according to NYT. The report, citing internal messages between Google employees, said the company’s reaction to the possible switch was “panic.”

Google’s success for years has overshadowed Microsoft’s Bing, but it became increasingly attractive when the web search engine recently implemented sophisticated AI technology. Bing recently implemented GPT-4 – a deep-learning model that accepts text and image prompts to generate human-like responses.

OpenAI, an AI research laboratory behind the impressive chatbot ChatGPT, developed this large language model. Earlier this year, Microsoft invested $10 billion in OpenAI.

Google’s Search Business Under Threat

AI-powered search engines such as the reinvented Bing are currently the most serious threat to Alphabet’s Google, which has dominated the search business for decades. According to NYT, the latest AI craze has forced the tech giant to start developing a brand-new AI-powered search engine and upgrading the existing one with AI features.

The report said that the immense success of OpenAI’s ChatGPT in recent months urged Google to create a separate task force in its search unit to start developing AI products and services. Since its launch in November, ChatGPT has become the fastest-growing consumer app in the world, reaching 100 million monthly active users in just two months. Other tech companies, such as China-based Baidu also recently announced plans to launch ChatGPT rivals.

Meanwhile, the South Korean electronics giant has not officially confirmed the NYT report about Samsung possibly replacing Google with Bing. Also, it remains unclear whether Microsoft’s recent AI efforts were the main reason why Samsung considered the switch after 12 years, though that was what Google employees were speculating, according to NYT.

This article originally appeared on The Tokenist