OpenAI’s Apple deal could be a bigger threat to Google than SearchGPT, analysts say

OpenAI is launching its rival to Google search — but it will have less of an impact on the search-engine giant’s dominance than OpenAI’s partnership with Apple could, analysts say.

SearchGPT, a temporary prototype of artificial intelligence-powered search features OpenAI plans to add to ChatGPT, is currently available to a small group of testers and publishers for feedback, the company announced Thursday. The prototype can provide users with faster answers that include links to relevant sources.

Google-parent Alphabet saw its stock fall 3% after the announcement, but SearchGPT “will likely have minimal impact on Google Search’s revenue,” analysts said in a Bank of America Global Research report. While analysts “expect interest” in OpenAI’s search product, AI integration is actually growing Google’s search business. In June, Google’s web traffic of 2.7 billion daily visits was 28 times that of ChatGPT’s traffic, according to the report.

However, analysts said they “see some longer-term risk” from a potential search partnership between OpenAI and Apple. In June, Apple announced it is integrating OpenAI’s ChatGPT-4o into its latest iPhone operating system, iOS 18, as well as iPadOS 18, and macOS Sequoia. OpenAI’s search engine could prove to be more of a competitor than Microsoft’s Bing, and if the Department of Justice’s antitrust case against Google is successful, analysts said OpenAI could become an alternative search provider.

“We still think it will be difficult for any partner to come close to matching the search capabilities and financial incentives from Google,” analysts said, adding that Google has a massive data set from billions of daily search queries, its own data centers, and its competitive chatbot, Gemini.

Rising ad revenue from Google Search drove Google’s profits up nearly 60% in the first quarter of the year, and the company beat Wall Street’s expectations, prompting analysts to raise their price targets for the company.