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Barrier lowered for Google rivals to distribute search

alternatives

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Building rival search products will take time, massive

resources

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Competitors face challenge wooing consumers away from

Google

By Kenrick Cai

SAN FRANCISCO, Sept 3 (Reuters) - A rising group of

artificial intelligence companies stand to gain from an

antitrust ruling on Tuesday that ordered Alphabet's

Google to share its invaluable search data with competitors.

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.

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.

The data-sharing requirement does not alter Google's

existing means of distribution, allowing the company to continue

to pay the likes of Apple ( AAPL ) to make its search engine the

default option. However, it lowers the barrier for competitors

to develop and distribute their own alternatives to Google

Search, experts 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.

OpenAI offers a search product within ChatGPT and Reuters

reported in July that is close to releasing a web browser to

challenge Chrome. Startup Perplexity, backed by Nvidia ( NVDA ),

has already released its own AI-powered search and browser

offerings, and is now negotiating to preload its browser onto

some phone makers' devices.

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.

Microsoft ( MSFT ) might make a renewed push to improve the

market share of Bing, and Apple ( AAPL ), viewed as an AI laggard after

failing to deliver on promised AI upgrades to key products like

Siri, could try to enter the search market, Mathivanan said.

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."