Panic in Google As Samsung Reportedly Plans to Make Bing Default Search Engine

Samsung is considering ditching Google for Bing as its default search engine, following the integration of ChatGPT 3 by Microsoft’s web search arm.

Google has enjoyed being used in Samsung phones as the default search engine for 12 years. The smartphone maker’s move will likely set an unpleasant precedent for Google search business, which has over 90 percent dominance of the search engine market.

New York Times reported that there was panic within Google when employees reportedly found out that Samsung was considering switching to Bing last month.

Alphabet Inc’s shares dropped by nearly 4% on Monday following the news.

Microsoft incorporated ChatGPT 3 into Bing early this year, marking the company’s most innovative move to wrestle some shares of the search engine market off from Google.

The emergence of the AI-powered chatbot, which Microsoft has invested billions of dollars in, has become the game changer for Bing. Google issued ‘code red’ late last year following the emergence of ChatGPT 3. The tech giant has since announced its own AI-powered chatbot named ‘Bard’ but said it does not intend to incorporate it into Google search.

If Samsung goes ahead with the plan, Google will lose $3 billion out of its $162 billion annual revenue, according to the company’s internal messages.

ChatGPT 3 provides humanlike context to queries with its capability to take on a whole range of tasks – from writing poems to codes.

But unlike ChatGPT 3, which accumulated over 100 million users within three months, Bard failed to impress potential users at trial. In early February, Google lost $100 billion after Bard collated inaccurate information in its promotional video. The chatbot also suffered other setbacks prompting Google’s employees to write CEO Sundar Pichai, criticizing the hurried nature in which it was launched.

Though ChatGPT 3 has experienced the same challenge of inaccurate information, Microsoft is working to make the AI tool reliable on Bing. The software maker is also working on onboarding other AI features, including Bing’s image generator.

Google is reportedly working to create a new AI-powered search engine. Pichai said in an interview with Wall Street Journal early this month that the company plans to use Large Language Models (LLM) to elaborate search contexts with conversational features.

“Will people be able to ask questions to Google and engage with LLMs in the context of search? Absolutely,” he said.

Samsung’s move will likely force Google to hasten its plans to integrate AI chatbot into search, even though the company said it’s working to make search experience better for users by improving its algorithm.

Atlantic Equities analyst James Cordwell told Reuters that “investors worry Google has become a lazy monopolist in search and the developments of the last couple of months have served as a wake-up call.”

Now we learn that Google was again blindsided by Samsung reportedly considering whether it really wanted to renew its $3 billion-a-year contract to keep Google Search as the default search engine on its mobile devices—or to instead switch to Microsoft’s A.I.-happy Bing, which was until recently more of a punchline than anything else.

According to the Times piece, Googlers “reacted with emojis and surprise” when asked to knock together a pitch that might convince Samsung to stay on board, with one saying “Wow, OK, that’s wild.” That right there is the definition of complacency.

I can certainly understand what’s behind it—Google’s global market share has been at 90% or more since the late noughties—and I also appreciate that Google’s reluctance to go all-in on generative A.I. is partially motivated by a desire to keep search reliable and safe. But there’s clearly a degree of organizational inertia involved when employees are shocked at the suggestion of a key business partner re-evaluating the competition (Fortune newsletter)