Microsoft Announces New Generative AI Search Using ChatGPT; Bada BING, Bada Boom—The AI Race Is On

Forbes Innovation Cloud Microsoft Announces New Generative AI Search Using ChatGPT; Bada BING, Bada Boom—The AI Race Is On Melody Brue Contributor Moor Insights and Strategy Contributor Group Opinions expressed by Forbes Contributors are their own. Following Feb 9, 2023, 05:54pm EST | Press play to listen to this article! Got it! Share to Facebook Share to Twitter Share to Linkedin Microsoft Chairman and CEO Satya Nadella at Microsoft headquarters in Redmond, Washington Dan DeLong When you’re looking for an answer to a question, want to find a local repair shop or need a recipe for braised short ribs, the typical response is to “Google it. ” In fact, Google is now recognized as a verb in the Merriam-Webster dictionary .

By this point, of course, Google has been the unquestioned leader in search for decades, despite various efforts by competitors to take that crown. Google has remained at the top of this food chain by optimizing the user experience—and capturing the lion’s share of advertising dollars—across new types of devices, voice search, e-commerce search and more. Enter AI, and Google now faces a new set of threats from rivals like Microsoft, who have narrowed the competition gap and forced the search giant’s hand in a matter of days.

In this article we will look at what is happening in generative AI and how Microsoft is on a mission to challenge Google’s search leadership. This includes Microsoft’s investment in OpenAI , the company behind ChatGPT (short for “chat generative pre-trained transformer”), a generative AI tool and the most quickly adopted product in history . What is ChatGPT and why is it relevant for search? ChatGPT is a natural language processing tool that can create content, images and even code on demand via conversations with a chatbot.

The AI-driven tool is built on OpenAI’s GPT-3 family of large language models. ChatGPT launched in November 2022 and amassed 100 million users in its first two months, although the app is often down or at capacity—which is probably to be expected in the context of such explosive adoption. An attempted login to ChatGPT on the morning of February 8, 2023.

Melody Brue Changes in consumer behavior and modern technologies have reshaped search in the past with shifts from desktop to mobile, tablets and other voice-commanded devices. Google wrote the playbook on how good search is conducted; the technology toolbox supporting that is unlikely to become irrelevant. But the burning question is: will AI become more relevant than what is in Google’s current toolbox for search? According to Microsoft CEO Satya Nadella, “The [AI] race starts today.

” MORE FOR YOU Meet The Unknown Immigrant Billionaire Betting Her Fortune To Take On Musk In Space Ukraine’s Paratroopers Are Getting Heavy, Slow Challenger 2 Tanks. That Could Force A Change In Tactics. You Can Never Be Too Rich Or Too Thin: Piaget Polo Perpetual Calendar Ultra-Thin Microsoft makes the first power play with OpenAI and ChatGPT In January, Microsoft invested an estimated $10 billion in OpenAI, valuing the company at $29 billion.

The company first invested $1 billion in OpenAI in 2019, and then more in a 2021 funding round when the startup was working closely with Azure, Microsoft’s cloud service. The most recent investment also seemingly made Microsoft the exclusive cloud computing provider to OpenAI. Along with this latest investment, Microsoft announced the new AI-powered Bing search engine and Edge browser.

Patrick Moorhead, CEO, and chief analyst at Moor Insights & Strategy was live tweeting his thoughts from the event; his enthusiasm (albeit tempered) was enough to convince me to install the browser and extension and check out the new Bing while I patiently keep my place on the waitlist for the full Microsoft Bing ChatGPT integration. My initial reaction is that the new Bing engine is slick and requires less eliminating of useless content than a typical Google search. The sorting is not intuitive in the “Google it” world I am used to.

Still, the conversational tone and variety of answers presented alongside aggregated information make it feel like asking a friend who knows you well enough to know how to answer your questions in a way you will understand. But just like that friend, the Bing engine’s accuracy should be checked. The data in the early version is not guaranteed to be accurate, and it may be some time before a high degree of accuracy can be promised.

This makes for a good reminder that misinformation and security must remain top-of-mind for any company releasing AI-generated content. These are topics Microsoft and Google are taking seriously—and for which they must take a strict approach to regulating, auditing and reporting. Google unveils Bard and Invests $300 million in Anthropic Earlier this week, Google announced Bard , a competitor to ChatGPT built atop Google’s powerful natural language processing model LaMDA (Language Model for Dialogue Applications).

Bard will be released to “trusted testers” outside the company at an undisclosed date soon. The company did not give a time frame for general availability but said it will be released to the public after testing safety issues and working out other kinks. Along with the release of Bard, Google has announced that it will allow developers to create their own applications by tapping into the company’s natural language models.

“Beyond our own products, we think it’s important to make it easy, safe and scalable for others to benefit from these advances by building on top of our best models,” Alphabet CEO Sundar Pichai wrote in a blog post about the topic. Of course, in all this one would assume that Google could not just sit idle after receiving Microsoft’s shot across the bow. The company held its own event in Paris a day after Microsoft’s event but drew a lackluster reception for a presentation that seemed rushed and unprepared—even though the company has pioneered many of the technologies behind generative AI products and has invested a hefty sum in the technology.

The botched demo, in which Bard produced an inaccurate response to a query among other snafus, sent Google parent Alphabet’s stock plummeting. Shares in the company were down 7. 7% after Wednesday’s event—meaning that the company lost $100 billion in value overnight.

Google also invested $300 million in Anthropic, one of the most hyped OpenAI rivals whose AI model “Claude” is a ChatGPT competitor. Using Google Cloud’s GPU and TPU clusters, Anthropic will train, expand and implement Claude. Anthropic’s history might give some people pause, however.

The company was started by a group of former OpenAI employees and backed by Sam Bankman-Fried—the now-indicted former CEO at the heart of the FTX scandal; it is still an open question whether the asset could be liquidated in the FTX Bankruptcy. There is more to this war than search Through Bing, Microsoft currently commands 3% of the global search market. Even modest gains in that number would mean billions of dollars in advertising revenue.

According to information shared by Microsoft, each percentage point of search advertising market share in yields an additional $2 billion in revenue. While this is a measly portion of Microsoft’s total annual revenue (nearly $200 billion in 2022), the growth opportunity is still significant. However, the war is not simply about search and ad dollars.

It is also about where that business comes from and how it affects the competition—in this case, Google. As laid out above, Google has spent a lot of money investing in AI, largely in response to competitive threats. Competition in the search market inevitably makes search less profitable for Google, not only if it loses some percentage of ad spend to Bing, but also through the increased expense of running AI-powered vs.

classic search engines. Whereas gaining search market share for Microsoft is nicely incremental, losing market share for Google hits the company hard. Search advertising revenue in the December 2022 quarter accounted for 56% of revenues for Alphabet, Google’s parent company.

A less profitable Google means less money in the company’s war chest to compete in cloud computing and other growth areas. The AI battle will play out in our daily lives and the modern workplace While Microsoft has put a lot of muscle into the search race, the company’s investment in OpenAI (again, dating back to 2019) was made with visions that reach well beyond chatbots. OpenAI technology can be integrated into the company’s productivity tools, including Outlook and Office 365.

This could take the form of digital assistants, bot-suggested PowerPoint content and formatting, email sorting and suggested replies based on previous interactions, suggested next best actions and more. Within Azure alone, the sheer popularity of OpenAI and ChatGPT could be enough to lure potential cloud customers away from Amazon or Google. And on the gaming front, Microsoft’s investment in OpenAI could give the company a competitive advantage over rivals Sony and Nintendo.

Microsoft also announced its intention to integrate ChatGPT into Microsoft Teams in a premium plan. The chatbot will suggest templates specific to the needs of the meeting organizer, generate notes from meetings, summarize content specific to users based on their needs and even translate notes and transcripts into 40 different languages. ChatGPT can also summarize meetings, calls and webinars into chapters, assign them titles and flag specific names and content.

This could be a game changer for reducing the number of meetings people need to attend while improving their ability to consume content relevant to them and their particular roles. My assessment is that this may free people to be more present and think more clearly during meetings because they won’t need to spend so much energy corralling participants, taking notes, or assigning post-meeting responsibilities. Ultimately, that means they can spend less time planning and more time executing.

Google likewise has plans for AI integrations beyond search. During the company’s earnings call, Google CEO Pichai spoke of integrating generative AI into most of its products, from Google Docs to Gmail. While he didn’t specify what AI-assisted emails would be like, he did broadly touch on designs and features Gmail might have.

It makes sense to me that in an application like email AI would be able to analyze content from previous interactions and suggest replies, automate workflows and follow-ups and integrate with scheduling tools. By linking applications like Gmail, Calendar and Chat, Bard can potentially act as anyone’s personal assistant, freeing up employees at every level in an organization to focus on more meaningful and strategic work. AI is not coming after your job—it could be creating jobs After a couple of months of what can only be described as brutal layoffs in Big Tech, it must be hard for recently laid-off Microsoft and Google employees (among others) to see the companies invest billions in the next wave of computing.

In reality, some of those layoffs were done to make room for hires in key strategic areas such as AI. According to ZipRecruiter data, postings for AI-related roles in January were up 6. 3% compared to February 2020.

AI is undoubtedly top-of-mind for Big Tech execs as they address Wall Street. As found in a Reuters analysis of recent earnings calls, Alphabet, Microsoft and Meta used variations of the terms “AI,” “generative AI” and “machine learning” or “ML” up to six times more often than in the previous quarter. Satya Nadella, CEO of Microsoft, has addressed AI specifically, noting in the company’s January layoff announcement that AI is driving the “next major wave of computing” as Microsoft uses AI models to build a “new computing platform.

” He also acknowledged that the company “will continue to hire in key strategic areas. ” Sounds like AI to me. “Bing”ing it home I do not think people will be saying “Bing that” anytime soon, but clearly Microsoft is serious about taking the lead in the AI war of the tech giants.

At least for now, it has presented some nice-looking solutions that feel well-thought-out, that fit cohesively into the company’s other products and services and that offer new layers and extensions for areas of its infrastructure where even incremental market gains are significant revenue drivers. These advantages could present an even bigger competitive moat between Microsoft and its competitors. It is important to note, however, that competition in the space is still heating up.

With additional players like Chinese tech giant Baidu announcing their own ChatGPT-style “Earnie Bot” this week, more rivals—big, small and maybe even some currently in stealth mode—are sure to follow. I agree with Moorhead’s assessment that it is a long game , and that Big Tech is here to play that game. It is far too early to call a winner, and I believe that generative AI is not a zero-sum game.

As with many revolutionary technologies, competition creates continual advancement, differentiated offerings tailored to a wide range of needs and an emerging balance of supply and demand. There is much more to tackle about how these tools will affect our lives—at home and at work—and how AI should be responsibly managed. I look forward to watching the long game, trying out each offering and seeing how tech companies and their AI models learn, evolve and grow.

When they are truly ready for prime time, I also look forward to seeing the impact on the future of work, productivity and automation to improve operations and efficiencies. Moor Insights & Strategy provides or has provided paid services to technology companies like all research and tech industry analyst firms. These services include research, analysis, advising, consulting, benchmarking, acquisition matchmaking, and video and speaking sponsorships.

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