Google is winning the AI search wars

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Despite widespread expectations that the arrival of ChatGPT nearly two years ago would bring upheaval to the internet search market, not much has changed. Another strong set of quarterly earnings this week showed that Google has absorbed generative artificial intelligence technology into its search engine and, if anything, is going from strength to strength.

Yet something new is in the air. A number of other events this week pointed towards a more disruptive phase in the AI-powered search wars.

First was Monday’s launch of Apple Intelligence, with a revamped Siri AI assistant as a centrepiece. The integration of OpenAI’s ChatGPT into Siri, due to follow soon, will give iPhone users a new way to search for information. That will open a crack in the tight partnership with Apple that has guaranteed a valuable flow of internet searches to Google — though a US antitrust ruling against Google in August has already threatened to unpick the relationship between the tech giants.

Meanwhile, Meta executives said on Wednesday that they were working on an expansion of web search inside their own AI assistant, known as Meta AI.

Meta did not confirm a report suggesting it was hoping to replace Google and Bing, which it uses to generate its search results, with its own search engine. But finance chief Susan Li pointed out that Meta already has its own web crawlers, one of the basic technologies behind search. She also said Meta AI expected to handle an increasingly broad set of search queries, including “more monetisable” ones — a clear sign that it has its sights set on moving on to Google’s turf. 

The third and most immediate challenge, however, came on Thursday with the news that OpenAI has started to integrate web search into ChatGPT, an idea it has been working on since July. Users of the chatbot will start to find news and other up-to-date information appearing in their conversations, along with links to sources on the web.

What’s notable is that none of these moves attack Google with a rival general-purpose search engine. That strategy has been a graveyard for would-be competitors over the years.

Instead, rivals are adding search to the chatbots and AI assistants that are starting to claim a bigger share of online attention. As these intelligent companions develop more skills and evolve into agents, with the power to take actions on their users’ behalf, the ability to pull information from the web will be an essential capability.

This presents Google with a classic dilemma often faced by dominant tech companies. Should it try to absorb a potentially disruptive technology into existing products? Or should it view this as the foundation for a new type of service that could one day threaten the old monopoly?

Google is trying to keep its options open. It has added AI Overviews — summaries of web pages generated by AI — to its search engine and has released a standalone chatbot, called Gemini.

It is clear which of the strategies plays to Google’s main strengths. This week it said AI Overviews were a hit with its search engine users and would be extended to 100 new countries, reaching 1bn people. It has already extended search advertising to Overviews, one of the factors behind its strong earnings report.

The company is facing greater competition when it comes to the emerging world of chatbots and assistants. OpenAI, for instance, says that 250mn people use ChatGPT at least once a week, creating an instant audience for its new search features, while 500mn people turn to Meta AI at least once a month.

Despite the competition, Google’s Gemini has plenty going for it. The Android operating system gives it a direct route to many smartphone users. This week it was embedded into Google Maps, one of seven Google services that reach more than 2bn people. 

And Google’s dominance of search should extend far into the AI era. According to judge Amit Mehta, who is overseeing the US antitrust case against it, the huge amount of search query data it has amassed has left it with unique insight into the web results users find most relevant — something generative AI models can’t do on their own.

Ingrained behaviour will make people slow to switch. Google’s role as the dominant, general-purpose search engine looks as secure as ever. But as search spreads to a new generation of AI-powered chatbots, assistants and agents, it can no longer count on its audience’s undivided attention.

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