Google’s online dominance is showing signs of cracking in AI era

More than three years into the generative artificial intelligence boom, Google has defied the many skeptics who thought ChatGPT would be the search giant’s death knell. But cracks are forming in its core business.

Search engine DuckDuckGo is seeing install rates jump by up to 40% a week. Microsoft’s Bing reached 1 billion users for the first time last quarter. And Google’s search engine traffic is down slightly over the past month, while ChatGPT is up a tick.

Google still controls 90% of the search market, its stock price has more than doubled in the past year and revenue growth in the first quarter was the fastest for any period since 2022. But the AI concern persists as more people turn to chatbots as their preferred method to track down information. ChatGPT consistently ranks as the top free app on Apple iOS, and Anthropic’s Claude is currently eighth, one spot behind Google Gemini.

Meanwhile, another wave of internet users is turning away from AI-powered search altogether in favor of non-AI alternatives. A Pew Research Center study published in March found that about half of Americans felt that AI in their daily lives made them “more concerned than excited.” Navigating the internet without it is one coping mechanism and, earlier this month, DuckDuckGo made a “no-AI” search engine with the launch of new browser extensions that allow users to default to noai.duckduckgo.com.

“A lot of people use Google because Google is like the front page of the internet, but they want to go on these journeys and do the clicking and searching themselves and make their own decisions,” said Lily Ray, vice president of search engine optimization and AI search at marketing firm Amsive.

Google is also reckoning with the challenge of fending off heavily funded AI upstarts that are paying top dollar for talent ahead of their prospective initial public offerings.

Last week, Noam Shazeer, a vice president of engineering and co-lead of Gemini AI, announced he was leaving Google to join OpenAI. And on Friday, John Jumper, DeepMind vice president and engineering fellow, said he was leaving for Anthropic.

Alphabet’s stock on Monday had its worst day in more than a year, dropping 5%.

Analysts at Jefferies wrote in a report that they “don’t read the recent departures as a signal that Google is doing less with AI, but rather as another data point in an industry-wide war for talent in which frontier labs are aggressively bidding.”

A Google spokesperson declined to comment for this story.

For Google, the emergence of generative AI has represented an existential risk of sorts since the launch in late 2022 of ChatGPT, which recently surpassed 1 billion monthly active users. The threat is both that Google loses its dominance and that, in trying to compete in AI, it cannibalizes search in favor of a new way of…