Google loses $100 billion after OpenAI announcement
One tweet sent shares of Google’s parent company spiralling, as a rival company shakes things up in a major way.
The value of Google’s parent company fell more than $100 billion after one tweet from a hugely popular artificial intelligence company.
OpenAI, creator of ChatGPT, on Tuesday announced its new search browser, mounting a direct challenge to the dominant Google Chrome.
The company shared a six-second video to X showing three tabs that read “live stream”, “today”, “10am PT” (Pacific Time), teasing an announcement during a livestream, where it later revealed its new browser called ChatGPT Atlas.
Shares in Alphabet Inc, which owns Google, rose up and down when markets opened but fell significantly almost two hours after OpenAI’s social media post
It sat at $252.68 by 11am (local time) but fell to $246.15, the lowest for the day, within 15 minutes, or reportedly equal to about $100 billion in market capitalisation.
The value did steadily recover throughout the day, closing at $250.46, but it was still down 2.37 per cent compared to Monday.
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Open AI boss Sam Altman said Atlas is an AI-powered web browser built around ChatGPT, which has exploded in popularity with an estimated 700 million worldwide users.
Atlas will allow users to use the artificial intelligence chatbot for everyday online tasks, such as ask questions and create summaries while they navigate any web page.
An “Ask ChatGPT” button is situated at the corner of a website, and clicking it will open a panel that enables the user to ask a question
“With Atlas, ChatGPT can come with you anywhere across the web — helping you in the window right where you are, understanding what you’re trying to do, and completing tasks for you, all without copying and pasting or leaving the page,” a description of it read.
“Your ChatGPT memory is built in, so conversations can draw on past chats and details to help you get new things done.”
During the live stream, Mr Altman and a team of executives demonstrated an “agent” mode that has a chatbot carry out searches on a user’s behalf.
He explained further that in agent mode, ChatGPT uses the web browser independently, returning with what it finds.
“It’s got all your stuff and is clicking around,” Mr Altman said.
“You can watch it or not, you don’t have to, but it’s using the internet for you.”
Atlas is already live on computers powered by Apple’s operating system free of charge, but agent mode will only be available to users of paid Plus or Pro versions of ChatGPT.
“We want to bring this to Windows and to mobile devices as quickly as we can,” Mr Altman said, without providing a timeline.
“This is still early days for this project.”
Some Atlas offerings demonstrated in the stream seemed similar to features already incorporated into Google Chrome and Microsoft Edge internet search browsers.
The San-Francisco based company has ramped up its challenge to Google, which has responded by rapidly building more AI capabilities into search and across its platform.
Pressure on Google
Tech industry rivals Amazon, Google, Meta, Microsoft and Elon Musk’s xAI have been pouring billions of dollars into artificial intelligence since the blockbuster launch of the first version of ChatGPT in late 2022.
“OpenAI’s browser puts pressure on Google,” Emarketer technology analyst Jacob Bourne told AFP.
“This is another step in the AI race as tech companies try to make their AI interfaces the first point of contact for internet users.”
OpenAI has an opportunity to ride the popularity of ChatGPT to win people over to its browser, according to the analyst.
However, Mr Bourne said Google has a significant infrastructure advantage in terms of providing browser capabilities to billions of users.
A big question is how well Atlas will perform when under pressure from the kinds of user volume handled by Google, he added.
The debut of Atlas comes on the heels of Google escaping a break-up of its Chrome browser in a major US competition case, but with the judge imposing remedies whose impact remains uncertain just as AI starts to compete with search engines.
Judge Amit Mehta, who found a year ago that Google illegally maintained monopolies in online search, did not order the company to sell off its widely-used Chrome browser.
Instead, he ordered remedies including requirements to share data with other firms so they could develop their own search products, and barring exclusive deals to make Google the only search engine on a device or service.
Mehta himself noted that the landscape has changed since the US Justice Department and 11 states launched their antitrust case against Google in 2020.
Challenges
OpenAI, Perplexity, and Microsoft have been ramping up challenges to Google, which dominates the online search market where it earns most of its revenue through targeted advertising.
OpenAI recently unveiled a new feature for ChatGPT, the leading generative AI model with 800 million weekly users, enabling it to interact with everyday apps like Spotify and Booking.com.
The new functionality enables ChatGPT to interact with various apps to select music, search for real estate or explore hotel and flight booking sites.
Meanwhile, Perplexity AI in August announced a new model for sharing search revenue with publishers.
The company’s media partners will get paid when their work is used by Perplexity’s Comet browser or AI assistant to satisfy queries or requests, according to the San Francisco-based start-up.
Perplexity is one of Silicon Valley’s hottest start-ups, whose AI-powered search engine is often mentioned as a potential disruptor to Google.
Google shares were down slightly more than one per cent in trading that followed OpenAI announcing Atlas.
-with AFP
Originally published as Google loses $100 billion after OpenAI announcement
