TECH IS AI HURTING GOOGLE SEARCH? IT'S COMPLICATED

IT'S COMPLICATED

- JEREMY KAHN

ALPHABET EXECUTIVES and investors watched anxiously over the past months as prosecutors in an antitrust case over Google's dominance of internet search press their arguments for ending the lucrative business arrangements between Apple and Google. The judge ruled last year that Alphabet's Google is a monopoly, and this phase of the trial will determine what should be done about it. But among the most damaging information to emerge concerned something perhaps just as existential as the judge's ruling: the potential of artificial intelligence, including Google's own AI, to undermine Google's enormously profitable Search business.

The bombshell moment came on May 8, when Apple executive Eddy Cue testified that the volume of Google searches on Apple's Safari web browser had declined for the first time in more than two decades. Cue attributed that decline to people using new AI-driven tools to find information.

The comments drove Alphabet's stock price down as much as 9% in intraday trading, and although shares clawed back some of those losses, the blow to shareholders' confidence resonated.

Investors have long worried that AI chatbots will eventually displace Google Search, which accounts for 56% of Alphabet's overall revenues, and is believed to account for a much larger percentage of its profits. But trying to tease out exactly how AI competition impacts Google, and which rivals might be gaining at Google's expense, is tricky.

COMPETING WITH ITSELF