Despite the growing popularity of AI, OpenAI's ChatGPT does not seem to be a significant threat to Google's standing as the leader in search engines, according to a new report by Bank of America Securities.
The analysts highlighted that the number of downloads for both ChatGPT and Microsoft's Bing have been declining in recent weeks, based on data from Sensor Tower. Justin Post, a BofA analyst, confirmed this in a recent note.
The report pointed out a 38% monthly decline in the download rate of ChatGPT on iPhones in the U.S. in June. Bing, which incorporates a ChatGPT-based chatbot in the U.S., also experienced a 38% decrease in downloads during the same period.
Meanwhile, Google's search engine market share has slightly increased year over year, with more than 92% market control according to SimilarWeb data. Bing, which leverages OpenAI’s ChatGPT technology, saw a decrease of 40 basis points annually, capturing approximately 2.8% of the market.
The dwindling interest in ChatGPT and other large language models (LLMs) underlines the potential risk for companies like Google and Microsoft who have poured billions into the prospect of AI innovations leading to a new-age search engine capable of superseding current leaders. These tech giants, along with others such as Nvidia, are also heavily investing in AI startups.
However, with the apparent slowdown in the adoption of ChatGPT, it suggests that this technology may not pose a significant threat to Google's search engine dominance. Consequently, companies may need to explore other uses for LLMs, like new advertising tools, the analysts suggested.
Commenting on the potential impact on Google’s stock, Post wrote, "LLM concerns for Google search have seemingly shifted from market share risk to monetization risk, but with search share seemingly healthy, Google may have less urgency to integrate LLM (chat) results into commercial queries."
The ChatGPT app, which was launched in May, is currently only available on iPhones. However, BofA analysts are optimistic that a forthcoming Android app from OpenAI could enhance adoption.
Apart from the app or Bing search engine, users can also engage with ChatGPT via its website. BofA analysts approximated that website visits to ChatGPT were down around 11% on a monthly basis, equivalent to just over 51 million visitors per week. This only represents about 2% of Google's projected web traffic.