Alphabet, Google's parent company, saw a drop of up to 4% in its stock on Monday, which wiped out approximately $55 billion in market value, following a report that Samsung is considering replacing Google as the default search engine on its devices with Microsoft's Bing.
Such a move could put about $3 billion in annual revenue at risk for Alphabet, which has been facing increased competition in search for the first time in decades after Microsoft integrated OpenAI's ChatGPT into its Bing search results earlier this year. Google has long held a dominant position in the search market, with a market share of about 90%, but this may change if Samsung chooses Bing as its default search engine across its hundreds of millions of devices.
The report also noted that Alphabet is working to defend its market share, with a team of more than 160 people working on incorporating AI features into its Google search product. Negotiations between Samsung and Microsoft are still ongoing, and Google could still become the primary search engine on Samsung devices if a deal is made.
However, the report underscores the importance for Alphabet to defend its search market share and remain competitive in the generative AI search market, where Microsoft's ChatGPT is thriving.
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