Will AI Really Be the Demise of Google Search?

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Will AI Really Be the Demise of

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Search?

Gabby Jones / Bloomberg via Getty Images

Questions about

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’s search dominance have been buzzing since ChatGPT exploded onto the scene in 2022.

Alphabet stock tumbled on Wednesday after an Apple executive said the company had considered adding AI chatbots from companies like OpenAI, Perplexity and Anthropic to its devices, a move that could erode

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’s share of the online search market.

After Alphabet’s quarterly earnings report last month, Wall Street analysts were generally optimistic about the steps

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had taken to monetize AI within its search engine.

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Search and related platforms accounted for more than half of Alphabet’s total revenue last quarter.

Alphabet (GOOG)(GOOGL) stock sank on Wednesday after comments from an Apple (AAPL) executive stoked concerns that artificial intelligence is chipping away at

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’s bread-and-butter online search business.

Apple senior vice president of services Eddy Cue reportedly said search volume in Apple’s Safari browser, in which

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is the default search engine, declined for the first time ever in April, which he attributed to the increasing popularity of AI alternatives.

According to Cue, Apple is considering adding AI-enabled search services like those from OpenAI, Perplexity and Anthropic to its devices at some point in the future.

Shares of Alphabet tumbled more than 7% on Wednesday to lead S&P 500 decliners.

Questions about

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’s search dominance have been buzzing about Wall Street ever since 2022 when OpenAI’s ChatGPT exploded onto the scene. Analysts immediately began speculating that AI chatbots would supplant search engines as internet users’ preferred source of information and analysis.

For some market watchers, Cue’s comments were further proof of this trend. “Search is shifting away from the traditional blue-link results page that we’ve loved for the past 25 years, to a simplified AI-powered result,” wrote Gene Munster, Managing Partner at Deepwater Asset Management, in a post to X. He says the change poses two problems for

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: “First, the monetization model of sponsored ads needs to be overhauled. Second,

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Search has new competitors, including OpenAI, Grok, Perplexity, etc.”

Wall Street analysts, though, were generally encouraged by what they saw in Alphabet’s

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last month. “We continue to believe

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has data and distribution advantages and has closed the (large language model) performance gap,” Bank of America analysts wrote of the company’s efforts to fend off AI-first competition.

“While still early days, we are excited about AI Mode which brings Gemini directly into search and adds advanced reasoning multi-modal capabilities,” said JPMorgan analysts, referring to an experimental search feature that, according to executives, could double the time users spend on

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.

Story Continues

Alphabet has a big head start on its AI-first competitors.

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’s share of global search traffic is estimated to be about 90%. The next-largest search engine,

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, is estimated to receive just 4% of all search queries.

The threat of AI companies encroaching on its search traffic is acute for Alphabet. Ads displayed on

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’s search engine and related properties like Gmail,

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Maps and

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Play, accounted for 56% of Alphabet’s total revenue in the first quarter.

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has made it a priority to keep its advantage by integrating AI into its search engine. The company has rolled out AI Overviews, which respond to queries from more than 1.5 billion users in 140 countries a month, said executives on Alphabet’s earnings call last month. Executives say AI summaries are monetized at approximately the same rate as traditional search.

One very serious risk to

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’s search dominance: antitrust enforcement. Last August, a federal judge agreed with Justice Department prosecutors that

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in the online search market. Cue’s comments on Wednesday came as part of testimony in proceedings meant to find a remedy to that monopoly.

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#Demise #

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#Search

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