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(Reuters) – Alphabet (NASDAQ:) Inc shares fell over 4% in premarket buying and selling on Monday after a report that South Korea’s Samsung Electronics (OTC:) was contemplating changing Google with Microsoft-owned Bing because the default search engine on its gadgets.
The report, revealed by the New York Instances over the weekend, underscores the rising challenges Google’s $162-billion-a-year search engine enterprise face from Bing – a minor participant that has risen in prominence not too long ago after the combination of the unreal intelligence tech behind ChatGPT.
Google’s response to the risk was “panic” as the corporate earns an estimated $3 billion in annual income from the Samsung (KS:) contract, the report mentioned, citing inside messages.
One other $20 billion is tied to the same Apple (NASDAQ:) contract that shall be up for renewal this yr, the report added.
Alphabet and Samsung didn’t instantly reply to Reuters’ requests for remark.
Google has for many years dominated the search market with a share of over 80%, however Wall Road fears the corporate may very well be falling behind Microsoft (NASDAQ:) in a fast-moving AI race.
Guardian agency Alphabet misplaced $100 billion in worth on Feb. 8 after its new chatbot, Bard, shared inaccurate data in a promotional video and an organization occasion did not dazzle.
On Monday, the inventory was buying and selling down at $104.50, whereas Microsoft outperformed the broader market with an increase of 1.9%.
“Buyers fear Google has change into a lazy monopolist in search and the developments of the final couple of months have served as a wake-up name,” Atlantic Equities analyst James Cordwell mentioned.
Cordwell added the potential prices tied to creating Google Search extra aggressive than AI-powered Bing is also a reason behind concern.
The NYT report mentioned Google was racing to construct an all-new AI-powered search engine that may supply a extra customized expertise than its present service, which can be set to be upgraded with AI options.