Key Points

• AI-based search engines could threaten Google’s dominance.
• Google’s AI integration raises concerns about traffic loss and censorship.
• Major platforms like Twitter and Facebook may soon launch AI search engines, challenging Google.
• Also: There is a changing of the guard, and The Next Nvidia is ready to soar

Summary

In this conversation, Lee and Doug discuss the growing concerns within Google (NASDAQ: GOOG) as AI-based search engines threaten to disrupt its dominance in the search market. They highlight how Google has already integrated AI into its search results, which has caused a decline in traffic for sites that previously ranked at the top. However, competitors like Twitter and Facebook are likely to develop their own AI-powered search features, potentially challenging Google’s market share. The discussion also points out that Google is heavily reliant on its search and YouTube platforms, making it vulnerable if its search business declines. They agree to revisit the topic in a few months to assess the progress of AI-driven search competitors.

Transcript:

Google has been by far and away the dominant search engine virtually worldwide.

It’s not true in Russia.

It’s not true in China because they’ve sort of got the great walls up they don’t want.

Right.

They don’t want that.

So really, this is like a two and a half decade run for Google.

All of a sudden, there’s panic at Google that AI-based search will replace Google-based search.

It looks to me like that might be possible.

I think it’s entirely possible.

I mean, Musk has already talked about it.

And you can bet, you can bet everybody that wants a piece of the search pie is figuring out a way to use applications for AI for a new search engine.

Well, what’s interesting is, and this has happened in the last few months, if you do a search at Google right now, Google gives you a Google-based AI summary.

It’s now right, you know, at the top right now.

A lot of people have lost traffic because of this.

Because it used to be if you indexed number one with the Google algorithm, you were up there at the top unless somebody bought the sponsor spot.

Exactly.

Anybody who used to be in that pole position, you can’t be there anymore.

So two things have happened.

The first one is that Google is using its own AI and it’s highlighting itself at the top.

The other one though, is that it looks like some people think that isn’t good enough.

You don’t need anything else.

You just need super duper AI-based search and that, you know, Google conceivably could lose a lot of its market share in the next year.

Well, I think, I think that that is a given and not that they will be toast, but they will be a go-to.

But I think one of the things that bothers a lot of people is that it is censored to some degree.

And that’s why a lot of people go to GoDuckGo and stuff like that.

Because, you know, whether you’re Republican, Democrat, Libertarian, Independent, whatever, if you want to find out about somebody or something, you want to be able to search for it.

And a lot of that, I think, gets censored and I think that will allow a lot of other AI competition to step in and say, hey, look, just like Musk says with X now, we are not censored.

You can say what you want, you know, within reason.

Something that I believe will happen now is that Twitter will have its own search feature, full search feature, like Google.

They will have licensed that from one of the other super AI companies.

And then you’ll go to Facebook.

It will have its own.

And I don’t mean like just search Facebook.

I mean, when you’re at Facebook, you have an AI-based search function that’s the whole web.

So that Google won’t just have an AI competitor.

It will have a whole bunch of AI competitors that are owned and operated by the people on the web who have the largest audience counts.

Yeah.

And the tough thing for Google, it’s like, OK, if we lose a big share of our search business, we can really fall back on our cloud business.

No, we can really fall back on our retail.

Oh, we don’t sell where you sell it.

You know, they don’t have the bench to go to if search starts to fall off.

Well, if you look at Google right now, it’s Google search and it’s YouTube, which is actually, to some degree, a search-based video operation.

They’ve tried to make money on YouTube by turning it into a subscription business.

If you look at their earnings, there’s a little bit of that in there.

But you make a very good point.

And that is that Google is a one-trick pony.

Yep.

That’s it.

That’s all they’ve got.

And I don’t know how, and again, is there advertising?

Sure, they have advertising dollars via all of their platform, but it’s nothing like the ancillary money that Instagram brings in or something like that that helps to fill in the basic advertising on the internet money.

So yeah, I think they could be in big trouble.

I think I would bet you if we go out another 120 days, you’ll start to see a major beta AI search engine available across the web.

It won’t be in the next couple of days, but it’ll be soon enough.

So I think you and I, and there may be several.

So why don’t we come back to this as we get towards the end of the year?

There are a lot of organizations that measure audience size.

So there’ll be third parties that will say Google’s traffic used to be here.

It’s now here.

These new emerging AI-driven search companies, you’ll be able to know from third parties how much it is.

So let’s come back to this, say, in 120 days and see if anybody’s actually made some progress.

I’ll guarantee you they will.

But let’s do it then.

We’ll do it then.

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