OpenAI announces a search engine called SearchGPT; Alphabet shares dip

OpenAI on Thursday announced a prototype of its own search engine, called SearchGPT, which aims to give users “fast and timely answers with clear and relevant sources.”

The company said it eventually plans to integrate the tool, which is currently being alpha-tested with a small group of users, into its viral chatbot, ChatGPT.

Since the launch of ChatGPT in November 2022, Alphabet investors have been concerned that OpenAI could take market share from Google in search by giving consumers new ways to seek information online. With this prototype, OpenAI is testing the waters for doing just that, promising users the chance to “search in a more natural, intuitive way” and ask follow-up questions “just like you would in a conversation.”

“We think there is room to make search much better than it is today,” OpenAI CEO Sam Altman wrote Thursday in a post on X.

Alphabet shares were trading about 2.5% lower on Thursday, while the Nasdaq was up slightly.

In May, Google launched AI Overview, which CEO Sundar Pichai called the biggest change in search in 25 years, to a limited audience, allowing users to see a summary of answers to queries at the very top of Google Search.

Though Google had been working on AI Overview for more than a year, public criticism mounted after users quickly noticed that queries returned nonsensical or inaccurate results within the AI feature — without any way to opt out.

The SearchGPT announcement follows OpenAI’s launch last Thursday of a new AI model, “GPT-4o mini.” The new model is an offshoot of GPT-4o, the startup’s fastest and most powerful model to date, which it launched in May during a livestreamed event with executives. 

OpenAI, backed by Microsoft, has been valued at more than $80 billion by investors. The company, founded in 2015, is under pressure to stay on top of the generative AI market while finding ways to make money as it spends massive sums on processors and infrastructure to build and train its models.

Last Month, OpenAI announced the hiring of two top executives as well as a partnership with Apple that includes a ChatGPT-Siri integration. Sarah Friar, previously CEO of Nextdoor and finance chief at Square, joined as chief financial officer, and Kevin Weil, an ex-president at Planet Labs and former senior vice president at Twitter and a vice president at Facebook and Instagram, joined as chief product officer.

OpenAI is bolstering its C-suite as its large language models gain importance across the tech sector and as competition rapidly emerges in the burgeoning generative artificial intelligence market. 

Both OpenAI’s new mini AI model and the prototype of SearchGPT are also part of the company’s push to be at the forefront of “multimodality,” or the ability to offer a wide range of types of AI-generated media, like text, images, audio, video and search, inside one tool: ChatGPT.

For SearchGPT, OpenAI’s blog post said the tool’s visual results will lead to “richer understanding” for users.

Last year, OpenAI Chief Operating Officer Brad Lightcap told CNBC: “The world is multimodal. If you think about the way we as humans process the world and engage with the world, we see things, we hear things, we say things — the world is much bigger than text. So to us, it always felt incomplete for text and code to be the single modalities, the single interfaces that we could have to how powerful these models are and what they can do.”