I think the OpenAI argument is overblown. While I do agree that AI is going to bring a huge shake up to the search market, I still believe that Google is in the best position to fight this battle. Realistically, given how fast the AI field improves month after month, do we think it will take long for Google to replicate a product similar to ChatGPT? I don't think so. And then they are the company that's best suited t…
Users who use ChatGPT do not see either Google's search page or any linked pages. Instead, the user gets a summary answer from ChatGPT that currently shows zero ads from Google (or anyone else). This summary is the obvious place for ads; Google knows this. And Google also knows that if it is not the default summary provider for most users (in the same that it is for search currently), then its ad business is definitely at risk.
In terms of addressing the risk, it's not so much a technical challenge [-1]; it is instead that Google's business model is largely based on embedding ads in millions of web pages (in a way that MS's is not). The problem with this is that they now have to figure out what an alternative business model (that puts ads in summaries) looks like, then shift their entire enterprise and their partners in the wider ad industry over to using it before ChatGPT becomes dominant [0]
It's an enormous challenge, and it is easy to see why Sundar has sensibly signalled a code red and is reaching for as much help as possible.
[-1] As observed, Google are very technically capable.
[0] Realistically, if they cannot provide a competitive offering before MS push ChatGPT into Word, Excel, Bing etc., history says it will be hard, verging on impossible, to ever get those users back.