Google needs to ramp up AI-powered search to keep Samsung

The need for Samsung

"Project Magi is all about personalized search," said Constellation Research founder and analyst R "Ray" Wang, confirming the Google news to TechTarget Editorial. "This was kicked off by Microsoft going after Samsung's Android business for Google search."

For its part, Microsoft has been aggressively incorporating ChatGPT into its platforms and applications, and is seen by many as the dominant force in the generative AI market.

Meanwhile, Samsung's contract with Google is nearing its end. Google reportedly pays Samsung more than $3 billion annually to remain as its search provider. While this is not as much as the company pays Samsung competitor Apple, it could still affect Google's $162 billion search business.

They need companies like Samsung.

"They need companies like Samsung," said Subodha Kumar, professor of statistics, operations and data science at the Fox School of Business at Temple University. If customers that pay relatively low prices, like Samsung, slip out of Google's hands, that could send Apple a strong message that it should also consider Microsoft Bing.

The possibility that it may lose Samsung is already affecting Google. Its parent company, Alphabet, suffered a dramatic drop in its stock price following The New York Times' April 17 story on the development.

Even so, it is unlikely that Samsung will replace Google as its default search engine, according to Michael Bennett, director of education curriculum and business lead for responsible AI at Northeastern University.

"The connective tissue built up between these two gargantuan corporations could not easily be replaced," Bennett said. "If Google is able to offer up a strong contender, the relationship is likely to hold, at least for the near future."

Needing a better search tool

However, with the popularity of ChatGPT and the new and improved Microsoft Bing, Samsung now has some leverage to bring to the negotiating table -- even if Bing doesn't have what it needs.

"Don't think that they might necessarily believe that it will provide something better than what Google is doing, but they might be using this as a tool to bargain," Kumar said.

Moreover, while Google is advanced in AI research and development, other than its newly released Bard chatbot, the tech giant is missing much of the conversational aspect of search that ChatGPT brought to the forefront.

Project Magi will help Google pull together all its AI products and features and provide a competing product to effectively challenge ChatGPT, Kumar added.

While it may seem like Google is taking an inordinately long time to come up with a compelling upgrade to its ubiquitous search function, the vendor is being careful, Wang said.

"It's about perception," he said. "Microsoft is going on the offense on AI, and it makes Google look like they are dragging their feet, when in reality Google is taking a more cautious approach because so much can go wrong with AI."

However, time is of the essence for Google. It needs to create not only a better and different AI-powered search platform but also one that reliably provides relevant and correct results that differentiate it from the still-young generative AI technology that powers ChatGPT and other new chatbots, Kumar said.

"Right now, we are getting lots of relevant results, but many of them are incorrect," he said, referring to widespread reports that ChatGPT often provides incorrect information and needs to develop more common good sense and sound judgment.

"Google has done a very good job in giving search results," Kumar continued. "They have to build that into their AI. If they can give results which are correct, which are consistent and which can read customer's minds better, they would have no problem."

Neither Google nor Samsung responded to requests for comment.

Esther Ajao is a news writer covering artificial intelligence software and systems.