Alphabet Inc. shares fell as much as 4% Monday following a report South Korea's Samsung Electronics was considering replacing Google with Microsoft-owned Bing as the default search engine on its devices.

The report, published by The New York Times over the weekend, underscores the growing challenges Google's $162-billion-a-year search engine business face from Bing — a minor player that has risen in prominence recently after the integration of the artificial intelligence tech behind ChatGPT.

Google's reaction to the threat was "panic" as the company earns an estimated $3 billion in annual revenue from the Samsung contract, the report said, citing internal messages.

Another $20 billion is tied to a similar Apple contract that will be up for renewal this year, the report added.

In a response to Reuters, Google said it was working to bring new AI-powered features to search without commenting on its association with Samsung. The South Korean consumer electronics major did not respond to a request for comment.

Google has for decades dominated the search market with a share of over 80%, but Wall Street fears the company could be falling behind Microsoft in a fast-moving AI race.

Parent firm Alphabet lost $100 billion in value on Feb. 8 after its new chatbot, Bard, shared inaccurate information in a promotional video and a company event failed to dazzle.

On Monday, the stock fell to $104.90 and erased nearly $50 billion from Alphabet's market capitalization. Microsoft, meanwhile, outperformed the broader market with a rise of 1%.

"Investors worry Google has become a lazy monopolist in search and the developments of the last couple of months have served as a wake-up call," Atlantic Equities analyst James Cordwell said.

Cordwell added the potential costs tied to making Google Search more competitive than AI-powered Bing could also be a cause of concern.