Samsung may be looking to swap out Google Search as the default search engine on its smartphones for Microsoft's AI-based Bing search engine. The move could cost Google up to$3 billion in annual revenue from its partnership with the South Korean electronics giant, according to a Yahoo report.

Samsung is second only to Apple in smartphone sales; it shipped 261 million smartphones worldwide last year. Samsung did not respond to a request for comment.

Both Google and Microsoft have been rolling out generative AI-based features for their search engines in recent months. Microsoft is infusing Bing with ChatGPT, which was developed by San Francisco-based start-up OpenAI. Google is using its own creation - the AI-based Bard chatbot.

"I don't know if the rumors about Samsung abandoning Google Search are true or not. If they are, I suggest its more than just about Microsoft having a share of OpenAI and ChatGPT, and may be more about business issues. After all, Samsung has many of its own AI tools in place and [is] aggressively pursuing more," said Jack Gold, principal analyst at industry research firm J. Gold Associates. 

Google Search is by far the most popular search engine, with about 80% of market share, according to research firm Statista. As of January 2023, Bing accounted for just 8.85% of the global search market. But in recent months, both Google's parent company, Alphabet, and Microsoft have been hailing generative artificial intelligence (AI) as key to their search engine future.

"Microsoft has been trying for over decade to make Bing a relevant search engine. While the infusion of ChatGPT will keep it alive, it will be challenging to convince users to switch off of Google, which has become synonymous with searching the Internet," said Dave McCarthy, vice president of cloud and edge infrastructure services at IDC.

ChatGPT is the world's leading chatbot in terms of use and recognition, and that may be a driving force behind reports that Samsung is considering a switch to Bing as its default. "There are a lot of knee-jerk reactions happening right now in regard to generative AI. It feels very similar to the hype that surrounded metaverse last year," McCarthy said.

Alphabet lost$100 billion in market value on Feb. 8 after it launched Bard; even in the company's promotional video, the chatbot gave inaccurate information. Employees admitted Google knew Bard would produce inaccurate information before the launch, but the company went live with it anyways, according to a Bloomberg report.

Bard was "a pathological liar," according to screenshots of the internal Google employee discussion. Another called it "cringe-worthy," Bloomberg reported.

Conversely, in February, shares of Microsoft rose by 3% after it announced ChatGPT capabilities would be incorporated into Bing. That said, ChatGPT has also had its share of very public errors. Neither chatbot can be fully trusted and require a human eye to ensure they're not producing errors or wildly controversial content known as "hallucinations".

"I wouldn't sell Google short in this space, even if it does have some short-term hiccups," Gold said. "ChatGPT may have the biggest share of press and consumer recognition, but that doesn't make it a sure winner. Remember all the search engines that were ahead of Google in the beginning? Where are they now? And Google has a ton of resources it can apply to this space."

Both Google and Microsoft believe their chatbot technologies are good enough to be used in a number of applications, and each company continues to roll out features in their products. Last month, Microsoft unveiled its Microsoft 365 Copilot chatbot to automate various tasks in multiple Office apps. That was followed by a new extension called Business Chat.

Google plans to add generative AI tools to its ad programs this year, according to a report this week in theFinancial Times. TheTimesclaimed a presentation to Google advertisers described how the AI tech would allow them to input content, including text, images, and video to Google's AI chatbot. The chatbot would then "remix" the content and generate ads based on goals such as audience and sales targets, according to a report in The Verge.

Google's dominance of the search engine market represents a nearly insurmountable mountain, according to Gold, and when it comes to smartphones, Samsung and Google are "joined at the hip."

"Each has major input into the newest Android versions," Gold said. "Obviously, Google owns it, but Samsung due to its massive Android market share has huge influence and even has provided some features to Google that made it into Android."

On the other hand, Microsoft's partnership with Open AI could bolster Bing's popularity - but not for a long time. And in the meantime, both generative AI technologies are struggling to fix problems.

If Samsung were to abandon Google Search for Bing, "it would indeed be a huge development, since there is so much search that takes place on smartphones," Gold said.

The AI-enabled search market highly competitive, according to McCarthy, "because whoever wins not only gets to be the key enabler of next-generation applications, but that company will also capture the revenue associated with the infrastructure to run it all."

"This might just be a bump in the road for Google, because it will be difficult to overcome its inertia in search. If Microsoft is successful, it just means more choice for users, which is always a good thing," McCarthy said.