Alphabet stock falls after OpenAI launches browser

Investing.com -- Alphabet (NASDAQ:GOOGL) stock closed down 2.4% on Tuesday after OpenAI announced a new AI-powered web browser, ChatGPT Atlas, seen as a direct competitor to Google’s dominant Chrome browser.

After hinting at the new product earlier Tuesday, in a mid-day live event, OpenAI CEO Sam Altman introduced the new browser. Rumors about an OpenAI browser have been circulating for several months.

OpenAI said ChatGPT will be built into the browser, not a bolt-on product. It will have an agent capable of multitasking. It will also have search, browser memory, and chat.

The new browser can summarize content, compare products, or analyze data on sites being browsed. The AI agent, available in preview for premium accounts, can interact with websites. The company said the agent can used to do tasks from start to finish, like researching and shopping for a trip.

ChatGPT Atlas will be rolling out on macOS today, with Windows, iOS, and Android coming soon.

The market reaction reflects investor concerns about potential threats to Alphabet’s core business segments. Google’s Chrome browser holds a commanding market share in the web browser space, and any significant new entrant backed by OpenAI’s artificial intelligence capabilities could represent a competitive challenge.

Commenting on the OpenAI development, Deepwater Asset Management Managing Partner Gene Munster, said he believes both OpenAI and Google can win in search. "Atlas raises the browser bar," Munster said. "Google will likely respond within a year."

Munster highlighted that Google shares recovered from their lows this afternoon after the OpenAI event ended, as there was no mention of monetization. Also, the features highlighted by OpenAI can be easily replicated by Google.

"I expect Google will have positive things to say about search next week, which will be a near-term sigh of relief," he added. "The long-term questions will remain."

(Frank DeMatteo contributed to this report)