Google's market dominance faces new competition from OpenAI’s SearchGPT, an AI-powered search engine offering summarised results with source links and follow-up queries. Announced on Thursday, the launch of SearchGPT marks a significant move into the search market by OpenAI, which is backed by Microsoft. The announcement caused Alphabet’s shares to drop by 3%.

Currently in its prototype stage, SearchGPT is being tested by a limited number of users and publishers. The tool aims to provide summarised search results with source links and allow users to ask follow-up questions for more contextual responses. OpenAI plans to integrate SearchGPT’s best features into ChatGPT in the future, with publishers having access to tools for managing their content’s appearance in search results.

Google, holding a 91.1% market share in search engines, may feel the pressure to innovate as competitors like OpenAI and Perplexity enter the arena. Perplexity is already facing legal challenges from publishers, highlighting the difficulties newer AI-powered search providers might encounter.

SearchGPT marks a closer collaboration between OpenAI and publishers, with News Corp and The Atlantic as initial partners. This follows OpenAI’s content licensing agreements with major media organisations. Google has yet to comment on the potential impact of SearchGPT on its business.