The rise of AI search tools like ChatGPT and Perplexity AI is significantly impacting the traditional search habits of internet users, posing a challenge to Google (GOOGL). According to data from Similarweb and Semrush, websites such as Tripadvisor (TRIP), Yelp (YELP), and Wikipedia are experiencing a decline in search engine-driven traffic, with significant year-over-year drops noted in May for travel and news sites.
In response, Google has integrated AI-generated summaries to retain users, although these summaries have reduced the visibility and click-through rates of traditional search results. Business Insider even faced layoffs due to traffic reductions, while Chegg (CHGG) saw its stock price plummet by 99% from its 2021 peak. Additionally, legal actions have been taken against Google for unauthorized use of content in AI summaries.
Reddit (RDDT, Financial) is eyeing growth through AI collaboration and remains a key platform in search discussions, with a notable increase in search referral traffic. Meanwhile, companies like Meta (META) and Nvidia (NVDA) are benefiting from the AI surge, as Meta leverages AI for advertising, and Nvidia provides high-performance chips necessary for AI models.
