Sam Altman-led artificial intelligence (AI) giant OpenAI is set to challenge Alphabet’s (GOOGL) Google Chrome with its own web browser. The Information was the first to report the news yesterday, citing people familiar with the matter. OpenAI is said to be in the very initial stages of this development and may not even launch a browser, the report added.
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The news comes as Google is preparing for a showdown with the U.S. Justice Department (DOJ) in an antitrust trial in 2025. The DOJ is pushing the federal judge to force Google to sell Chrome to end its dominance in online search. GOOGL stock closed down 4.7% on the news yesterday, while all major tech stocks have been rising following Nvidia’s (NVDA) post-earnings rally.
Further Details of OpenAI’s Browser Push
The Microsoft-backed (MSFT) AI company would reportedly combine the web browser with its generative AI model ChatGPT. OpenAI has held private discussions about the browser with website and app developers, including Conde Nast, Redfin (RDFN), and Eventbrite (EB). Sources also said that they have seen prototypes of the products.
This would be a second area in the technology space in which OpenAI is challenging Google. The former has already launched a SearchGPT, rivaling Google in the online search space. If OpenAI launches a web browser, it could put a dent in Google’s thriving browsing business that generates billions of dollars in ad revenues. Meanwhile, Google has also launched its own generative AI chatbot, Gemini, to thwart ChatGPT’s dominance.
The report also said that OpenAI is discussing empowering AI features on Samsung-made products, which is a vital partner for Google. OpenAI already has a tie-up with Apple (AAPL) to empower the “Apple Intelligence” features with its technology. Overall, OpenAI is making waves on all technological fronts, threatening the existence of tech biggies such as Alphabet, Microsoft, and Apple. Since ChatGPT was such a big hit, it would not be surprising to see a successful web browser from OpenAI. It’s a wait and watch story for Google now with the looming fight with the DOJ and OpenAI’s growing ambitions.
Is Google a Buy or Hold?
Despite the noise from the DOJ lawsuit, Wall Street seems to think that a possible remedial breakup of Google is unlikely. Many analysts have commented that it could take years before any negative outcome is reached, with Google set to appeal the ruling.
On TipRanks, GOOGL stock has a Strong Buy consensus rating based on 27 Buys versus seven Hold ratings. The average Alphabet Class A price target of $208.16 implies 24.2% upside potential from current levels. Year-to-date, GOOGL shares have gained 20.3%.
