Tuesday’s CEO Satya Nadella claimed that Google’s main business’s high profit margins would be destroyed by Microsoft’s use of artificial intelligence in ChatGPT to upend the internet search market.
According to Nadella, “the [gross margin] of search is going to drop indefinitely from here on,” in a Financial Times interview.
Nadella made his comments as Microsoft unveiled an update to its Bing search engine that will include AI advancements that have been sweeping the tech sector since the launch of ChatGPT more than two months ago.
Google is fighting to regain lost ground with the introduction of ChatGPT, which provides text answers to complex questions without the need for a traditional search engine. Google has said that it will release its own chatbot and add AI components to its search engine.
The use of linguistic AI to supplement or possibly replace internet searches has brought to light the risk of considerably higher costs for search companies. Nadella said he was open to the “demonetization” of the search market, which brought in $11 billion for Microsoft in 2017.
As the search market undergoes its first big change in years as a result of Google’s late response to ChatGPT, Microsoft has a unique opportunity to assert a technological advantage. Microsoft asserted that OpenAI, a San Francisco-based AI research organisation in which Microsoft recently announced a “multibillion-dollar” investment, revised their language AI system on which the company’s redesigned search was based.
The CEO highlighted Google’s impending AI-powered search products, which he called the “800-pound monster.” Customers would be required to select their desired product.
In the early days of search, Microsoft invested a lot of money to fight with Google, but it was unable to challenge its hegemonic control. Statcounter estimates that Bing barely represents 3% of all queries.
Microsoft debuted a new version of Bing on Tuesday, claiming that it will be instantaneously accessible to everyone using a desktop computer, but only for “a limited number of queries.” A box that runs down the right side of search results pages as part of the redesign aims to extract information from the web pages returned by a search.
To pursue relationships with AI groups, big IT giants employ their cloud computing divisions.
Additionally, it has a chatbot that can make shopping lists and plan vacation itineraries, similar to ChatGPT, as well as a tool that can produce emails and shopping lists based on search terms.
The improvements, according to Nadella, signalled the beginning of a new “race” in the market for internet search engines that will upend “the largest software category on planet earth.”
He declared, “It’s a new day in search.” “Rapid innovation is coming; in fact, the race has just begun.”
After conducting their initial searches on the new platform, Bing users would need to sign up for a waiting list in order to enjoy “the full experience” of the service, according to Microsoft. Additionally, it stated that it would roll out the service “to millions of individuals in the next weeks” and introduce a mobile version.
Several AI integrations into search and mapping tools, including interactive 3D models of some cities like London and Los Angeles, were announced by Google during an event held on Wednesday in Paris. Prabhakar Raghavan, senior vice-president of Google, noted that even though search has been around for 25 years, “I think that our journey has just begun.”