TL;DR:
- App downloads for ChatGPT and Microsoft Bing have slowed in recent weeks, according to Bank of America Securities’ analysis.
- ChatGPT downloads on iPhones in the U.S. were down 38% month-over-month in June, while Bing app downloads with ChatGPT were also down 38%.
- Google’s search engine market share slightly increased to over 92%, while Bing’s market share declined to about 2.8%.
- The diminishing interest in ChatGPT and large language models (LLMs) indicates potential investment risks for Google and Microsoft.
- Companies may need to explore alternative applications for LLMs, such as new advertiser tools.
Main AI News:
Artificial Intelligence (AI) has been the talk of the town in the technology industry, but OpenAI’s ChatGPT is facing challenges in dethroning Google as the search engine leader, as per a recent analysis conducted by Bank of America Securities.
According to BofA analyst Justin Post’s note on Wednesday, Sensor Tower data revealed a decline in app downloads for ChatGPT and Microsoft Bing in recent weeks. In June, ChatGPT downloads on iPhones in the U.S. dropped by 38% compared to the previous month. Similarly, Bing app downloads, which incorporate a ChatGPT-based chatbot in the U.S., also witnessed a 38% decrease in June.
The note further highlights that Google’s search engine market share has slightly increased year-over-year, reaching over 92%, based on SimilarWeb data. In contrast, Microsoft’s Bing, which leverages OpenAI’s ChatGPT technology, experienced a decline of 40 basis points, settling at approximately 2.8% of the market.
The waning interest in ChatGPT and other large language models (LLMs) underlines the investment risk faced by companies like Google and Microsoft. These companies have invested billions of dollars with the belief that recent AI advancements could usher in a next-generation search engine capable of overthrowing the current champion. Notably, Google, Microsoft, and other tech giants like Nvidia are also allocating substantial resources, amounting to hundreds of millions, towards AI startups.
However, the decelerating adoption of ChatGPT suggests that this technology may not pose a serious threat to Google’s search engine dominance. Consequently, companies might need to explore alternative applications for LLMs, such as developing innovative advertiser tools, as highlighted by the analysts.
Regarding Google’s stock, Post stated in the note, “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 was launched in May, currently exclusively available for iPhones. Analysts at Bank of America anticipate that the upcoming release of an OpenAI app for Android could potentially bolster adoption.
Aside from the dedicated app or Bing search engine, users can access the ChatGPT chatbot through its website. Bank of America analysts estimate that visits to ChatGPT witnessed an 11% monthly decrease, reaching slightly over 51 million weekly visitors, accounting for just 2% of Google’s estimated web traffic.
Conclusion:
The sluggish downloads of ChatGPT and Microsoft Bing with ChatGPT-based chatbots raise concerns about the potential for these AI technologies to challenge Google’s dominance in the search engine market. Despite the significant investments made by Google and Microsoft, the declining adoption of ChatGPT suggests that these large language models may not pose a serious threat to Google’s search engine market share.
This analysis highlights the need for companies to find alternative applications for LLMs beyond search engines, such as developing innovative advertiser tools. The market dynamics indicate a shift from market share risk to monetization risk for Google, potentially reducing the urgency to integrate LLM results into commercial queries. Further developments, including the release of an OpenAI app for Android, could impact the future adoption of ChatGPT.
