Google might lose $3billion in annual revenue if Samsung decides to terminate its contract with Google and go ahead with Bing as the default search engine for its devices.
According to reports, Samsung is considering terminating its contract with Alphabet Inc. and planning to establish Bing as the default search engine on its devices. This has led Alphabet, the parent company of Google, to go into panic mode as the company tries to get ahead of the damage it may cause.
Alphabet Inc. earns $3 billion dollars in annual revenue from the Samsung contract. If Samsung decides to terminate its contract with Alphabet and go ahead with Bing as the default search engine, it would mean a huge loss in revenue for Alphabet. Alphabet lost 4% in market share on Monday after reports came out that Samsung may dump the Google search engine.
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ChatGPT overtaking the AI market
Chat GPT took over the world when it launched last November. When ChatGPT launched, Google claimed that it wanted to do its version right instead of wanting to do it first. But the ChatGPT phenomenon has taken over the whole world with all the major tech fanatics adopting it.
Before the Launch of ChatGPT, Bing was a minor player in the search engine market with Google dominating the market share. Bing rose to prominence after the integration of the Artificial Intelligence (AI) technology behind ChatGPT. Bing is a microsoft product and ChatGPT is developed by OpenAI, which is a Microsoft-backed AI firm.
Micrsosoft’s search engine Bing, which is now powered by Open AI’s Chat GPT-4, holds an edge over Google search engine. Considering the success of chat GPT, Samsung’s move to reportedly feature Bing as the default search engine appears to be a deliberate marketing strategy.
The reports of Samsung dumping Google have sent the latter into a panic mode with the company announcing that it is developing new AI powered features for its own search engine. Google did not directly comment on the announcement’s association with the Samsung reports.
Google rushing to launch its own version of AI powered search engine
After the reports came out that Smasung might be considering terminating its contract, Alphabet lost as much as 4% in market share on Monday.
Alphabet is already struggling to catch up in the AI race. On Feb 8, the company faced a loss of $100 billion in value after its new chatbot Bard released incorrect information in a promotional video which led to the company event being heavily scrutinized.
The New York Times has reported that company is working on a new project called ‘Magi’ to compete against the AI powered Bing.
Project ‘Magi’ is Google’s version of the AI powered Bing. The project, if successful, will lead to the search engine being backed up by AI software. The company is trying its best not to lose one of its biggest revenue makers i.e. Samsung.
A company spokesperson has commented that Google will be bringing new AI powered features and that the company will release more details soon.
Google has dominated the search engine market for decades with a market share of over 80%. But its inability to keep up with the ongoing AI race might lead to the rise of search engines like Bing.
