ARK-Logo-BlackBy Frank Downing & Nick Grous | @ARKInvest
Next Generation Internet Director of Research & Associate Portfolio Manager
Last week, OpenAI upgraded1 ChatGPT’s search capabilities, as rumors swirled2 that Meta is building an in-house search engine to capitalize on its AI’s capabilities. Like Perplexity, OpenAI and Meta are offering AI-driven assistants that collectively could create a significant challenge to Google’s dominance in search. In traditional search, users must comb through a list of hyperlinks ranked by relevance, while the new AI-powered assistants respond with coherent, conversational narratives that they have synthesized from various information sources.
The shift from traditional search to AI-first workflows could upgrade the user experience significantly by saving time and improving the quality of results. Google’s link-based advertising model could be disrupted in the process if, in response, traditional search ad inventory declines. In a new model, AI-first workflows could integrate ads seamlessly and pleasingly into interactions between users and AI assistants.
Importantly, the evolution toward AI-first information discovery could transform search from a “product” to a widely available “feature,” potentially eroding Google’s moat. If users were to gravitate toward the AI assistants that Perplexity, OpenAI, Meta, and even Google’s own Gemini now offer, search could shift from a “product” that users harness, to a “feature” that AI assistants use in answers to user questions or requests. In this new paradigm, the companies hosting AI assistants will choose which search engine to use, as well as when and how to use them. Perhaps those companies will vertically integrate, creating their own search engines and taking share from Google and Bing.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
