Alphabet Drops 5% as Google Search Faces AI Challenge, ChatGPT Hits 1B Monthly Users

Alphabet's stock price fell 5% on Monday, marking its largest single-day decline in over a year, as Google's search dominance faces mounting pressure from AI chatbots and competing search platforms. ChatGPT's monthly active users exceeded 1 billion, while Google search traffic declined over the past month. Microsoft's Bing surpassed 1 billion users for the first time last quarter, and privacy-focused DuckDuckGo saw installation increases of up to 40% per week.

The shift poses a threat to Google's core advertising business, which accounts for roughly three-quarters of its revenue. AI-powered search results that provide direct answers may reduce user clicks to external websites and ads. Separately, AI talent is migrating to rivals, with Gemini co-lead Noam Shazeer joining OpenAI and DeepMind VP John Jumper heading to Anthropic.