OpenAI announces a search engine called SearchGPT; Alphabet shares dip

OpenAI on Thursday announced a prototype of its search engine, called SearchGPT, which aims to give users "fast and timely answers with clear and relevant sources."

The company said it eventually plans to integrate the tool, which is currently being tested with a small group of users, into its ChatGPT chatbot.

The rollout could have implications for Google and its dominant search engine. Since the launch of ChatGPT in November 2022, Alphabet investors have been concerned that OpenAI could take market share from Google in search by giving consumers new ways to seek information online. 

With this prototype, OpenAI is testing the waters for doing just that, promising users the chance to "search in a more natural, intuitive way" and ask follow-up questions "just like you would in a conversation."

"We think there is room to make search much better than it is today," OpenAI CEO Sam Altman wrote Thursday in a post on X.

Alphabet shares fell more than 3% on Thursday to close at $167.28, while the Nasdaq was down less than 1%.

In May, Google launched AI Overview, which CEO Sundar Pichai called the biggest change in search in 25 years, to a limited audience, allowing users to see a summary of answers to queries at the very top of Google Search.

Though Google had been working on AI Overview for more than a year, public criticism mounted after  users quickly noticed that queries returned nonsensical or inaccurate results within the AI feature — without any way to opt out.

"Google has been kind of shaking in their boots a little bit since this stuff first popped off," said Daniel Faggella, founder and head of research at Emerj Artificial Intelligence Research, referring to generative artificial intelligence. "We haven't seem their company