Alphabet shares fall after OpenAI unveils Google search competitor
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The news: Microsoft-backed OpenAI on Friday morning unveiled a prototype search engine called SearchGPT that a "small amount" of users are trialling.
The numbers: Google parent company Alphabet fell 3.6% in after-hours trading following OpenAI's announcement.
Google dominates the lucrative search market, with its eponymous tool being responsible for about 90% of search-engine traffic, according to Statista.
The context: The startup said it would eventually integrate the best bits of SearchGPT into ChatGPT.
OpenAI has been seen as a potential threat to Google's search dominance since ChatGPT exploded in popularity in 2022. Google has integrated AI into its search engine partially to fend off competition from the likes of ChatGPT and Jeff Bezos-backed Perplexity.
Speculation that Alphabet's crown jewel could be scratched by AI competition has thus far not turned into reality. This week Alphabet reported double-digit advertising revenue growth for its second quarter.
SearchGPT, however, represents a more direct challenge from the world's leading AI lab to Google than anything that's come before.
What they said: "We’re testing SearchGPT, a prototype of new search features designed to combine the strength of our AI models with information from the web to give you fast and timely answers with clear and relevant sources," OpenAI said in a blog.
"We’re launching to a small group of users and publishers to get feedback. While this prototype is temporary, we plan to integrate the best of these features directly into ChatGPT in the future."
