Google’s Android Power Faces New Threat From Samsung-Perplexity Talks, Says BofA

Bank of America said the rise of alternative AI technologies could weaken Google’s bargaining power with companies like Samsung, which rely on Android but are increasingly exploring new software capabilities.

Bank of America (BofA) said on Tuesday that the reported discussions between Samsung and Perplexity AI highlight how artificial intelligence is expanding strategic options for device makers and could erode Alphabet’s (GOOG/GOOGL) influence over Android hardware partners.

The brokerage reiterated its ‘Buy’ rating on Alphabet and maintained a $200 price target, according to a note cited by TheFly. 

It said the rise of alternative AI technologies could weaken Google’s bargaining power with companies like Samsung, which rely on Android but are increasingly exploring new software capabilities.

Google’s Android model, according to Bank of America, operates on “both a carrot and stick” approach to retain original equipment manufacturers (OEMs) within its ecosystem. Still, competition is intensifying.

Bloomberg reported that Samsung is close to finalizing a deal to invest roughly $500 million in Perplexity AI, valuing the startup at $14 billion. 

The agreement would mark Samsung as one of Perplexity’s largest investors and would include integrating the company’s AI-powered search features across a range of Samsung products.

The report highlighted that the companies are discussing preloading Perplexity’s assistant on future Samsung devices, embedding its search engine into the Samsung Internet browser, and potentially incorporating it into Bixby. 

The goal, according to the report, is to offer Perplexity as a default assistant option beginning with the Galaxy S26, slated for release in the first half of 2026.

While BofA said the partnership could increase competitive pressure on Google, it also noted that Samsung’s browser has just a 2.12% market share, compared to 66% for Chrome, potentially limiting the near-term financial impact on Google’s search revenue.

Apple (AAPL) has reportedly held talks with Perplexity as well, exploring the startup’s potential as an alternative to Google Search or ChatGPT within Siri. 

Motorola has already partnered with Perplexity, making the startup an early player in mobile AI integration.

Alphabet’s stock was down more than 1% in morning trade on Tuesday. The shares have fallen nearly 12% this year and 3% over the past 12 months.

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