Google is testing a new feature on its homepage called "AI Mode," which appears directly beneath the search bar and beside the "Google Search" button. This feature replaces the previous "I’m Feeling Lucky" widget.
Background
The introduction of AI Mode comes as Alphabet investors express concerns about OpenAI’s growing influence in the search market. Since the launch of ChatGPT in November 2022, there have been worries that OpenAI could capture market share from Google by providing consumers with new ways to seek information online.
OpenAI has expanded its offerings with "ChatGPT search," positioning itself to compete more directly with search engines like Google and Microsoft’s Bing. Microsoft has invested heavily in OpenAI, creating tension between its own products: Copilot and Bing.
User Base and Competition
Google is also working to grow its user base for its Gemini AI product. Recent analysis revealed during an antitrust court session in April indicated that Gemini currently has 35 million daily active users, significantly lower than ChatGPT’s estimated 160 million daily active users.
A Google spokesperson stated, "We’re constantly testing and iterating on our homepage experience," when asked about AI Mode.
Market Reactions
The test of AI Mode occurs amid increasing concerns from Alphabet investors about competition from other tech companies, including:
- Meta Platforms Inc.
- Amazon.com Inc.
- Baidu Inc.
- ByteDance Ltd.’s TikTok app
These companies are developing their own artificial intelligence tools or integrating them into existing services like chatbots or virtual assistants.
Stock Market Impact
- Alphabet shares fell 0.6% on Monday after closing up 1% the previous week.
- Meta Platforms’ shares rose nearly 4% last week following CEO Mark Zuckerberg’s announcement of an AI-powered version of Facebook called Llama (Large Language Model Meta AI).
- Microsoft Corp.’s stock price increased nearly 3% last week after reporting quarterly earnings that exceeded analysts’ expectations, partly due to strong sales growth from its Azure cloud computing business.
- Shares of Baidu closed up nearly 10% on Monday after reports of plans to sell cars made by Geely Automobile Holdings Ltd through Alibaba Group’s Taobao platform.
- ByteDance’s TikTok app is expanding into e-commerce through partnerships with brands like Sephora and LVMH Moet Hennessy Louis Vuitton SE.
- In contrast, Amazon.com shares have fallen over $100 billion since January due to inflationary pressures affecting consumer spending, while Apple shares are down around $200 billion amid concerns over slowing demand for iPhones.
Concerns Over AI Technology
Biden administration officials have raised concerns about potential risks posed by large language models developed by companies like OpenAI, Meta Platforms, and ByteDance’s TikTok app. U.S.-based researchers have questioned whether these models can be used maliciously, such as in deepfakes, although experts state there is currently no evidence of effective malicious use against individuals.
Perspectives from Tech Leaders
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Mark Zuckerberg, CEO of Meta Platforms, believes there will be significant opportunities emerging from generative AI technology but cautioned that not all applications would be beneficial. He emphasized the need for proper management to mitigate risks and highlighted the importance of user control over AI interactions to prevent digital addiction.
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Sundar Pichai, CEO of Alphabet, mentioned that the company is working on building safety features related to AI systems. He emphasized the commitment to ensuring that AI systems align with human values to prevent unintended harm, a challenge known as the "alignment problem."
In summary, as Google tests its new AI Mode feature, the competitive landscape in the tech industry continues to evolve, with significant implications for user engagement, market dynamics, and the ethical considerations surrounding AI technology.
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