OpenAI to release web browser in challenge to Google Chrome

OpenAI is close to releasing an AI-powered web browser that will challenge Alphabet's (GOOGL.O), market-dominating Google Chrome, three people familiar with the matter told Reuters.

The browser is slated to launch in the coming weeks, three of the people said, and aims to use artificial intelligence to fundamentally change how consumers browse the web. It will give OpenAI more direct access to a cornerstone of Google's success: user data.

If adopted by the 500 million weekly active users of ChatGPT, OpenAI's browser could put pressure on a key component of rival Google's ad-money spigot. Chrome is an important pillar of Alphabet's ad business, which makes up nearly three-quarters of its revenue, as Chrome provides user information to help Alphabet target ads more effectively and profitably, and also gives Google a way to route search traffic to its own engine by default.

OpenAI's browser is designed to keep some user interactions within a ChatGPT-like native chat interface instead of clicking through to websites, two of the sources said.

The browser is part of a broader strategy by OpenAI to weave its services across the personal and work lives of consumers, one of the sources said.

OpenAI declined to comment.

The sources declined to be identified because they are not authorized to speak publicly on the matter.

Led by entrepreneur Sam Altman, OpenAI upended the tech industry with the launch of its AI chatbot ChatGPT in late 2022. After its initial success, OpenAI has faced stiff competition from rivals including Google and startup Anthropic, and is looking for new areas of growth.

In May, OpenAI said it would enter the hardware domain, paying $6.5 billion to buy io, an AI devices startup from Apple's (AAPL.O), former design chief, Jony Ive.

A web browser would allow OpenAI to directly integrate its AI agent products such as Operator into the browsing experience, enabling the browser to carry out tasks on behalf of the user, the people said.

The browser's access to a user's web activity would make it the ideal platform for AI "agents" that can take actions on their behalf, like booking reservations or filling out forms, directly within the websites they use.

TOUGH COMPETITION

OpenAI has its work cut out - Google Chrome, which is used by more than 3 billion people, currently holds more than two-thirds of the worldwide browser market, according to web analytics firm StatCounter. Apple's (AAPL.O), second-place Safari lags far behind with a 16% share. Last month, OpenAI said it had 3 million paying business users for ChatGPT.

Perplexity, which has a popular AI search engine, launched an AI browser, Comet, on Wednesday, capable of performing actions on a user's behalf. Two other AI startups, The Browser Company and Brave, have released AI-powered browsers capable of browsing and summarizing the internet.

Chrome's role in providing user information to help Alphabet target ads more effectively and profitably has proven so successful that the Department of Justice has demanded its divestiture after a US judge last year ruled that the Google parent holds an unlawful monopoly in online search.

OpenAI's browser is built atop Chromium, Google's own open-source browser code, two of the sources said. Chromium is the source code for Google Chrome, as well as many competing browsers including Microsoft's (MSFT.O), Edge and Opera (OPRA.O).

Last year, OpenAI hired two longtime Google vice presidents who were part of the original team that developed Google Chrome. The Information was first to report their hires and that OpenAI previously considered building a browser.

An OpenAI executive testified in April that the company would be interested in buying Chrome if antitrust enforcers succeeded in forcing the sale.

Google has not offered Chrome for sale. The company has said it plans to appeal the ruling that it holds a monopoly.

OpenAI decided to build its own browser, rather than simply a "plug-in" on top of another company's browser, in order to have more control over the data it can collect, one source said.