Shares of Alphabet fell over 3% in early trading on Monday due to concerns that AI-powered rivals, including Microsoft’s Bing, could take market share from Google's core search engine.

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Google employees reportedly panicked after learning that Samsung was considering making Bing the default search engine on its devices.

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Google is developing a new AI-powered search engine called Project "Magi" to address competition from rivals, with an AI chat tool available to answer questions.

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The project is expected to be unveiled to the public next month.

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Google spokesperson Lara Levin stated that the company has been using AI for years to improve the quality of its results.

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Microsoft has invested in and partnered with OpenAI, the company behind ChatGPT, to deploy similar technology in Bing and other productivity tools.

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Other tech companies, including Meta, Baidu, and IBM, as well as a slew of startups, are racing to develop and deploy AI-powered tools.

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However, there are risks in embracing AI technology, which can make mistakes and "hallucinate" responses.

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Google and Alphabet CEO Sundar Pichai stressed the need for companies to "be responsible in each step along the way" as they build and release AI tools.

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Pichai expressed his belief that AI tools will ultimately have broad impacts on businesses, professions, and society.