Is OpenAI the Bigger Threat to Google's Search Dominance?
Google, long synonymous with internet search, now faces two formidable challenges: regulatory scrutiny and the rapid rise of AI. While a recent U.S. ruling found that Google built an illegal search monopoly, the larger threat may not come from regulators but from the advancements in artificial intelligence—particularly from OpenAI
Arvind Jain, a former Google engineer, points out, “AI is fundamentally changing how the search product works.” This shift is happening far faster than the legal processes that could take years to impact the market. Despite Google’s commanding 90% market share and $175 billion in annual revenue from search, AI is already beginning to erode its dominance.
Apple’s recent partnership with OpenAI to integrate ChatGPT into its upcoming devices is a significant signal of this shift. Although Apple has historically defaulted to Google as its search engine, the non-exclusive nature of its new deal suggests a future where AI-powered search services may take precedence. If antitrust rulings force Apple to sever its search deal with Google, the move towards AI-driven search will only accelerate.
OpenAI, backed by Microsoft, is also making its own foray into the search industry with the slow launch of #SearchGPT —an AI-powered search engine offering real-time access to information.
Former Google executives and Wall Street analysts agree that Google has the assets needed to lead in #AI, from a robust language model to an established search engine. Yet, Google’s response to the AI surge seems fragmented, especially when compared to OpenAI’s focused and aggressive push into the market.
Generative AI’s explosive popularity caught Google off guard. Despite being a pioneer in the foundational research behind this technology, Google was late in bringing a consumer product to market. By the time #Google launched its AI-powered features, ChatGPT had already become the fastest-growing consumer app in early 2023.
Rebecca Wettemann, CEO of research firm Valoir, notes that the real threat to Google may be internal. Trust is key to AI adoption, and Google's early missteps have put it on the back foot as it tries to keep pace with OpenAI and other competitors.
Gil Luria, an analyst at D.A. Davidson, believes that the ongoing regulatory scrutiny and the AI challenge are interconnected. “Part of the reason the DOJ is coming after Google's business practices is that the market is in flux right now, and they want to ensure Google does not extend its current market dominance.”
The antitrust ruling may open the door for more players in the search market, but as Richard Socher, CEO and founder of AI search engine startup You.com, points out, breaking Google’s search dominance will be incredibly difficult. No one has yet made a significant dent in Google's hold on search, but with AI reshaping the landscape, consumers might finally see real alternatives emerge.
Story by Okemwa Felix
