Shares of Google parent Alphabet fell more than 3% in early trading Monday after a report raised concerns that its flagship search engine could lose market share to AI-powered rivals, including Microsoft’s Bing.

Last month, Google employees learned that Samsung was considering making Bing the default search engine on its devices instead of Google’s search engine, sparking a “panic” within the company, according to a New York Times report, citing internal messages and documents. (CNN has not reviewed the material.)

In an effort to address growing competition, Google is said to be developing a new search engine powered by artificial intelligence called Project “Magi,” according to the Times. The company, which reportedly has around 160 people working on the project, aims to change the way results appear in Google Search and will include an AI chat tool available to answer questions. The project is expected to be unveiled to the public next month, according to the report.

In a statement to CNN, Google spokesperson Lara Levin said the company has been using AI for years to “improve the quality of our results” and “offer completely new ways to search,” including a feature launched last year that allows users to search by combining images and words.

“We have done so in a responsible and helpful manner that maintains the high standard we set for providing quality information,” Levin said. “Not every brainstorm or product idea leads to a launch, but as we’ve said before, we’re excited to bring new AI-powered features to Search and will share more details soon.”

Samsung did not immediately respond to a request for comment.

Google’s search engine has dominated the market for two decades. But the viral success of ChatGPT, which can generate compelling written responses to user requests, appeared to put Google on the defensive for the first time in years.

In March, Google began opening access to Bard, its new AI chatbot tool that competes directly with ChatGPT and promises to help users outline and draft essays, plan a friend’s baby shower, and get lunch ideas based on what’s in the refrigerator.

At an event in February, a Google executive also said the company will bring “the magic of generative AI” directly to its core search product and use artificial intelligence to pave the way for the “next frontier of our information products.”

Meanwhile, Microsoft has invested and partnered with OpenAI, the company behind ChatGPT, to implement similar technology in Bing and other productivity tools. Other technology companies, including Meta, Baidu and IBM, as well as a number of startups, are racing to develop and deploy AI-based tools.

But technology companies face risks in adopting this technology, which is known to make mistakes and “mind-blown” responses. This is particularly true when it comes to search engines, a product that many use to find accurate and reliable information.

Google came under fire after a Bard demo provided an inaccurate answer to a question about a telescope. Shares of Google parent company Alphabet fell 7.7% that day, wiping $100 billion off their market value.

Microsoft’s Bing AI demo was also criticized for several errors, including an apparent lack of differentiation between types of vacuum cleaners and even made-up information about certain products.

In an interview with 60 Minutes that aired Sunday, Google and Alphabet CEO Sundar Pichai highlighted the need for companies to “be responsible every step of the way” as they create and release artificial intelligence tools.

For Google, he said, that means allowing time for “user feedback” and making sure the company “can develop stronger security layers before building, before deploying more capable models.”

He also expressed his belief that these AI tools will ultimately have broad impacts on businesses, professions, and society.

“This will affect every product of every company and that’s why I think it’s a very, very profound technology,” he said. “And so, we’re just in the early days.”