Swedish Consulate – Google is confronting a significant challenge from Sam Altman’s OpenAI, which is proving to be a more pressing issue than the potential outcomes of antitrust decisions from US regulators concerning the internet search market. While a recent US court ruling determined that Google had established an illegal search monopoly, which is considered a significant victory for regulators, the growing adoption of AI tools, such as OpenAI’s widely used ChatGPT, is already diminishing Google’s market dominance, according to sources, investors, and analysts.
Arvind Jain, a former Google engineer who spent a decade working on various products including Google Search, noted, “For Google right now, AI is a much bigger deal than the ruling. AI is fundamentally altering the way search products function.” Jain, who now operates an enterprise search company called Glean, pointed out that the effects of AI are immediate, whereas the consequences of regulatory rulings, which often face appeals, take longer to manifest in the market.
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Google’s Dominance in the Search Market
Google has long been synonymous with internet search, commanding approximately 90% of the global market share and generating around $175 billion annually from its search operations. Even Apple, known for its preference to develop its own software and hardware, has historically made Google its default search engine for a substantial fee. However, this preferential arrangement is nearing its end. Apple has recently announced a partnership with OpenAI to integrate ChatGPT into its forthcoming devices, highlighting the non-exclusive nature of the deal and indicating that it might also collaborate with Google.
Analysts suggest that a ruling against Google could accelerate Apple’s transition to AI-driven search services, particularly if it necessitates the termination of its search agreement with Google. Additionally, OpenAI, backed by Microsoft, has recently entered the search market with a gradual rollout of SearchGPT, an AI-powered search engine offering real-time information from the internet.
