April 17 (Reuters) – Alphabet Inc. (GOOGL.O) stock dropped as much as 4% on Monday after it was said that Samsung Electronics (005930.KS) of South Korea was thinking about switching from Google to Bing, which is owned by Microsoft (MSFT.O), as the preferred search engine on its devices.
The report, which was released by the New York Times over the weekend, shows how Bing is becoming a bigger threat to Google’s $162 billion-a-year search engine business. Bing was once a small player, but it has become more important since it started using the AI technology behind ChatGPT.
Internal messages were used to back up the report, which said that Google’s response to the threat was “panic” because the Samsung contract brings in about $3 billion a year for the business.
The story also said that another $20 billion is tied to an Apple (AAPL.O) contract that will be up for renewal this year.
Google told Reuters that it was working on adding AI-powered features to Search, but didn’t say anything about its relationship with Samsung. The South Korean electronics giant didn’t answer when asked for a response.
Google has had more than 80% of the search market for many years, but Wall Street is worried that the company could be falling behind Microsoft in the AI race, which is moving quickly.
Alphabet’s parent company lost $100 billion in value on February 8 because its new chatbot, Bard, gave wrong information in an advertising video and a company event didn’t impress.
Alphabet’s market value went down by almost $50 billion on Monday when the stock fell to $104.90. Microsoft, on the other hand, did better than the market as a whole by going up by 1%.
“Investors worry that Google has become a lazy monopolist in search, and the events of the past few months have been a wake-up call,” said James Cordwell, an analyst at Atlantic Equities.
Cordwell also said that the costs of making Google Search more competitive than AI-powered Bing could be a worry.