Look out, Google! An up-and-comer is taking aim at your strong hold on the web-search market. OpenAI (the developer of artificial intelligence-powered chat platform ChatGPT) is tinkering with its own search engine. Leveraging the company’s existing tech, this new platform promises “fast and timely answers with clear and relevant sources” to users’ queries. At stake is a piece of the $200 billion search engine market currently dominated by you-know-who.
Alphabet shares were down following OpenAI’s announcement.
Except, maybe shareholders of Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) don’t actually need to worry too much about the development. There are reasons beyond serving up well-sourced responses to web queries that Google is still and will remain the dominant name in the search business.
What Sam Altman said
There’s little doubt as to the intent. As OpenAI’s chief executive Sam Altman plainly posted at X (formerly Twitter) Thursday afternoon, “[W]e think there is room to make search much better than it is today.” He adds that while this new platform — called SearchGPT — is still in testing mode for now, “[W]e will learn from the prototype, make it better, and then integrate the tech into ChatGPT to make it real-time and maximally helpful.” That certainly sounds like a stab at Google.
It’s not unfair to wonder, however, if it’s a solution to a problem that doesn’t exist. And if the problem does exist, might Alphabet already be answering the call?
Actually, yes, it is. Some users of the Google search engine have already been exposed to an add-on search feature called AI Overview, which offers in-depth, custom-crafted, plain-language responses to more complicated queries in addition to Google’s typical web-search results The early version of this tech wasn’t great in that it delivered problematic and even dangerous responses to users’ questions. It was and still is a work-in-progress. though.
And it’s not just Google working on this idea either. Last year, Microsoft (NASDAQ: MSFT) (which holds an equity stake in OpenAI, by the way) integrated ChatGPT-like technology into its Bing browser. Since then, it’s turned OpenAI’s artificial intelligence tech into a full-blown — and revenue-bearing — personal assistant called Copilot.
The funny thing is, numbers from GlobalStats’ Statcounter say Bing has barely made a dent in Google’s share of the worldwide search engine market. Google is still holding in the low-90% area, as it has for over a couple of decades now.
What gives?
Alphabet’s Google brand is just too strong to rattle now
Anything can always be made technically “better,” to be fair. But “better” doesn’t inherently make a product or service more marketable.
Take 3D televisions as an example. They were technologically superior to traditional TV sets when they first debuted a little more than a decade ago. As it turns out, consumers just wanted their television-watching experience to be a little more casual and a little less immersive.
GoPro‘s action cameras are another such example. No one denies they’re the best action cameras on the market. It’s just that the world doesn’t need that many action cameras.
Perhaps Alphabet’s biggest edge in terms of keeping OpenAI’s nascent search engine effort in check, however, isn’t operating a superior search engine or providing real utility to the masses. It’s a combination of everything else Google offers the internet’s most frequent users coupled with the fact that it’s been around for so long that the search engine has simply become most everyone’s default gateway to the web.
As to the first of these arguments, think about it. Google isn’t just a search engine. Its Gmail is also the world’s most-used free email-service provider, boasting nearly 2 billion users who can’t easily abandon their email address now. Google Docs, YouTube, online video calling, a web browser, and an app store that supports the world’s most-used mobile operating system (that’s Android) all collectively fuel a digital ecosystem that just makes Google the easiest and most efficient way to navigate the internet.
And the second part of the two-part argument? Google isn’t just a search engine. The name has also become a verb that succinctly explains the process for retrieving information from the worldwide web; most of us have likely added the term “Google it” to our lexicon, in much the same way “Xerox it” became verbal shorthand for making photocopies back when that tech was a must-have in most offices.
That’s powerful.
This dip is an opportunity
Sure, Alphabet must respect what OpenAI is doing. Crazier things have upended entrenched companies, after all.
Rather than fear it, Alphabet is in a terrific position to learn from SearchGPT’s successes and failures, and respond as merited with its own AI search tech. There’s little doubt it’s already got the audience it needs to monetize and make the most of its effort. More to the point, the stock’s recent weakness is a long-term buying opportunity.
In the meantime, Microsoft and OpenAI may soon find themselves rethinking their relationship, which appears to have just devolved from a partnership to a competition.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
No, Alphabet Shareholders Don’t Need to Worry About OpenAI’s SearchGPT was originally published by The Motley Fool