Google has issued a "code red" over the rise of the AI bot ChatGPT, The New York Times reported. CEO Sundar Pichai redirected some teams to focus on building out AI products, the report said. The move comes as talks abound over whether ChatGPT could one day replace Google's search engine.

Google's management has issued a "code red" amid the launch of ChatGPT — a buzzy conversational-artificial-intelligence chatbot created by OpenAI — as it's sparked concerns over the future of Google's search engine, The New York Times reported Wednesday.

Sundar Pichai, the CEO of Google and its parent company, Alphabet, has participated in several meetings around Google's AI strategy and directed numerous groups in the company to refocus their efforts on addressing the threat that ChatGPT poses to its search-engine business, according to an internal memo and audio recording reviewed by The Times.

In particular, teams in Google's research, trust, and safety division, among other departments, have been directed to switch gears to assist in the development and launch of AI prototypes and products, The Times reported. Some employees have been tasked with building AI products that generate art and graphics, similar to OpenAI's DALL-E, which is used by millions of people, according to The Times. 

Google's move to build out its AI-product portfolio comes as Google employees and experts alike debate whether ChatGPT — run by Sam Altman, a former Y Combinator president — has the potential to replace the search engine and, in turn, hurt Google's ad-revenue business model. 

Sridhar Ramaswamy, who oversaw Google's ad team between 2013 and 2018, said ChatGPT could prevent users from clicking on Google links with ads, which generated $208 billion — 81% of Alphabet's overall revenue — in 2021, Insider reported.

ChatGPT, which amassed over 1 million users five days after its public launch in November, can generate singular answers to queries in a conversational, humanlike way by collecting information from millions of websites. Users have asked the chatbot to write a college essay, provide coding advice, and even serve as a therapist.

But some have been quick to say the bot is often riddled with errors. ChatGPT is unable to fact-check what it says and can't distinguish between a verified fact and misinformation, AI experts told Insider. It can also make up answers, a phenomenon that AI researchers call "hallucinations."

The bot is also capable of generating racist and sexist responses, Bloomberg reported.

Its high margin of error and vulnerability to toxicity are some of the reasons Google is hesitant to release its AI chatbot LaMDA — short for Language Model for Dialogue Applications — to the public, The Times reported. A recent CNBC report said Google execs were reluctant to release it widely in its current state over concerns over "reputational risk."

Chatbots are "not something that people can use reliably on a daily basis," Zoubin Ghahramani, who leads the Google's AI lab Google Brain, told The Times before ChatGPT was released. 

Instead, Google may focus on improving its search engine over time rather than taking it down, experts told The Times.

As Google reportedly works full steam ahead on new AI products, we might get an early look at them at Google's annual developer conference, I/O, which is expected to take place in May.