Alphabet stock was slipping early Friday while the broader stock market was gaining. Stockholders might be nervous about a possible rival to the company's Google search engine from artificial-intelligence company OpenAI.
Alphabet stock was down 1% in premarket trading. S&P 500 futures were up 0.3%.
Microsoft-backed OpenAI is planning to unveil its AI-powered search product on Monday, Reuters reported, citing people familiar with the matter. It's a move that would bring the ChatGPT developer into much more direct competition with Alphabet's Google.
So far, AI hasn't seemed to make much of an impression on the search-engine market despite the sector being targeted by companies such as Perplexity, an AI company backed by Nvidia and Amazon founder Jeff Bezos. Issues around the reliability of AI-generated answers and the cost of carrying out queries have limited the technology's capacity to replace current search engines.
Google has added a generative AI feature to its own standard search engine, responding to similar efforts from Microsoft to enhance its Bing product. However, due to its current domination of the market, Alphabet is the company with the most to lose if OpenAI can make a big leap forward in AI-powered search.