Google logo on side of black building

Google is facing a new threat to its search business, with the rise of AI-powered competitors like Microsoft’s Bing. In March of this year, Google employees were shocked to learn that South Korean electronics giant Samsung was considering replacing Google with Bing as the default search engine on its devices.

According to internal messages reviewed by The New York Times, Google’s reaction to the Samsung threat was one of “panic”. An estimated $3 billion in annual revenue was at stake with the Samsung contract, with an additional $20 billion tied to a similar Apple contract that will be up for renewal later this year.

In response to the challenge from AI-powered competitors, Google is racing to build an all-new search engine powered by the technology. The company is also upgrading its existing search engine with AI features, under the project name Magi. The new search engine will offer users a more personalized experience, attempting to anticipate their needs and provide them with more relevant search results.

Google’s priority is to win control of the industry’s next big thing. Plans for the new search engine are still in the early stages, with no clear timetable for its release. However, the company is already adding features to its existing search engine using AI, with more than 160 people working full-time on the project.

Magi will keep ads in the mix of search results, since search ads are the primary way Google makes money. Queries that could lead to a financial transaction, such as buying shoes or booking a flight, will still feature ads on their results pages.

Last week, Google invited some employees to test Magi’s features, and it has encouraged them to ask the search engine follow-up questions to judge its ability to hold a conversation. The company plans to initially release the features to a maximum of 1 million people, with that number expected to progressively increase over time.

Google has been doing AI research for years, and its DeepMind lab in London is considered one of the best AI research centers in the world. The company has been a pioneer with AI projects, such as self-driving cars and large language models that are used in the development of chatbots. In recent years, Google has used large language models to improve the quality of its search results, but has held off on fully adopting AI because it has been prone to generating false and biased statements.

Despite these challenges, Google remains the most widely used search engine in the world. Billions of people use Google’s search engine every day for everything from finding restaurants and directions to understanding a medical diagnosis. However, the rise of AI-powered competitors like Microsoft’s Bing represents the most serious threat to Google’s search business in 25 years, and the company is determined to stay ahead of the curve with its new AI-powered search engine.