Google's AI rivals get a boost from data-sharing order, but tech giant far from routed

Matching Google's heft, though, will take time and huge resources, with no guarantees that any rival product will win as many users, experts said.

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While Google was spared the devastating outcome of having to sell its popular Chrome browser and Android operating system, U.S. District Judge Amit Mehta's ruling was a nod to regulators' efforts to level the playing field for companies who have invested billions to boost their AI business.

"The emergence of GenAI changed the course of this case," Mehta wrote in his ruling.

He said that tens of millions of people use generative AI chatbots like ChatGPT, Perplexity, and Claude to gather information that they previously sought through internet search. While these chatbots are not yet close to replacing traditional search, the industry expects that developers will continue to add features to GenAI products to perform more like Google Search, he said.

These AI products, some say, pose a bigger threat to Google than the antitrust case. But development will take time and resources, giving Alphabet investors a measure of confidence in the near term.

MASSIVE CAPITAL NEEDED

The current slate of AI search engines and browsers has not made a material dent in Google's market share. While ChatGPT, OpenAI's popular AI chatbot, has outpaced Google's offering, Gemini, in terms of users, Google has sought to counteract the effect through features like AI Overviews and AI Mode to keep users on its search engine.

"It takes effort for competitors to rely on the syndication and indexes that Google can provide to build a consumer facing experience," said Deepak Mathivanan, an analyst with Cantor Fitzgerald. "And it would take a longer period of time for consumers to also embrace these new experiences."

Indexing is how Google discovers, analyzes and stores website pages in its vast database for relevant search results, while propagating the reach of a website through republishing content.

Even with access to Google data, it would be "astronomically expensive" for rivals to build the kind of product that could pry users away from Google, said Ben Bajarin, CEO of tech consulting firm Creative Strategies.

Nevertheless, a number of well-capitalized AI startups have already poured significant amounts of venture capital funding towards doing exactly that.

Alphabet CEO Sundar Pichai expressed concerns during the trial in April that the data-sharing measures sought by the U.S. Department of Justice could enable Google's rivals to reverse-engineer its technology.

By gaining insights into Google's market-leading IP, tech giants with giant coffers could make a new run at the search market.

Judge Mehta said in his order that allowing Google to continue paying other companies to promote its search engine “is more palatable now” because “established technology companies are making, and start-ups are receiving, hundreds of billions of dollars in capital to develop [generative AI] products that pose a threat to the primacy of traditional internet search.”

Reporting by Kenrick Cai in San Francisco; Editing by Sayantani Ghosh and Sonali Paul

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