Weekend reports that Samsung Electronics is considering using Microsoft Corporation (NASDAQ:MSFT)'s Bing as the default search engine on its devices, which sent shares in Google parent Alphabet Inc (NASDAQ:GOOG) sharply lower on Monday.
The news resulted in “panic” at Google, which earns an estimated $3 billion in annual revenues from the Samsung contract, the New York Times reported, citing internal messages.
While Google has been the dominant search engine until now, “the shine has come off Alphabet as the AI battle heats up,” commented Chris Beauchamp, chief market analyst at IG.
Alphabet’s shares tanked in early February after Google’s chatbot Bard AI made a factual error in its first foray, wiping more than US$100 billion from the company’s market value.
According to the New York Times report, Alphabet is now in a race to incorporate more AI features into its Google search product.
Alphabet’s shares were 3% down at $105.70 in early afternoon trade.
Contact the author at stephen.gunnion@proactiveinvestors.com