OpenAI Announces AI-Powered Search Engine That Could Challenge Google—And Alphabet’s Stock Drops 3%. Here’s What To Know.

TOPLINE

Shares of Google parent firm Alphabet fell 3% to a 2024 low on Thursday, after OpenAI launched a test version of SearchGPT, a new artificial intelligence-powered search engine to be implemented into ChatGPT that could enter OpenAI into an internet search market dominated by Google.

KEY FACTS

SearchGPT, a new search engine created with OpenAI’s AI models, launched as a temporary “prototype” among a small group of users—reportedly including about 10,000 people—and publishers, the company said.

Alphabet shares fell to a new 52-week low of $167.32 as trading closed on Thursday.

SearchGPT summarizes information from websites and then provides short descriptions with an attribution link instead of linking directly to a website, and allows users to ask follow-up questions or open other relevant links in a sidebar.

In one example, searching for musical festivals in Boone, North Carolina, in August results in a list of each festival and a short description, followed by a link to a website for that festival, with a sidebar with links to other relevant results like event scheduling or ticket sales.

Publishers will be able to “manage how they appear” in search results, according to OpenAI, noting publishers can opt out of having their content used to train OpenAI’s models while still appearing in searches.

OpenAI said it plans to “integrate the best of these features” into ChatGPT in the future, though the company didn’t specify which features would be included.

WHAT WE DON’T KNOW

It’s not immediately clear how long the testing period will last and when SearchGPT will become more widely available.

KEY BACKGROUND

There has been speculation on a new search engine from OpenAI this year, as the company moves to compete with Google in the search market. Bloomberg reported in May—citing a person familiar with the matter—that OpenAI was developing a new search feature for ChatGPT intended to compete with Google and the AI search startup Perplexity. At the time, OpenAI was “aggressively trying to poach Google employees” to develop the product, according to The Verge. OpenAI was reportedly planning the new search engine in May, before Google announced plans for its Gemini AI products at the company’s annual developer conference. OpenAI has partnered with several publishers over the last year, including the Associated Press, the Financial Times, The Wall Street Journal parent News Corp, and Politico and Business Insider’s parent company Axel Springer, among others. The partnerships allow OpenAI to use content by each publisher to help answer user queries and train the company’s AI models.

TANGENT

The New York Times filed a lawsuit against OpenAI and Microsoft in December alleging “unlawful use” of millions of copyrighted articles by the publisher being used to train AI models. The Times alleges OpenAI and Microsoft’s technology that powers ChatGPT and Bing Chat, now called Copilot, could “Generate output that recites Times content verbatim, closely summarizes it and mimics its expressive style.” OpenAI filed a motion to dismiss parts of the complaint, suggesting users did not use ChatGPT or other products from the company as a “substitute” for a subscription to the Times. The lawsuit is ongoing.