- Microsoft has invested $1 billion in OpenAI, which built ChatGPT, and plans to integrate ChatGPT into Bing.
- Bing hasn’t come close to touching Google’s search dominance since its launch in 2009.
- Many have said that Google search has stagnated and competition from Bing and ChatGPT could change that.
ChatGPT, the generative AI app that went mega-viral at the end of 2022, has been touted as the savior – or destroyer – of everything from academic rigor to all marketing professions..
Also on this list: search engines. While Google is the undisputed leader in Internet search, many were quick to say that ChatGPT could disrupt its reign. Although there has been valid skepticism that ChatGPT is an immediate threat to Google, that could change soon.
The Information Microsoft and ChatGPT creator OpenAI are working to integrate the technology into Microsoft’s perpetually neglected search site, Bing. Microsoft invested $1 billion in OpenAI in 2019and it seems that this investment is paying dividends.
Bing has been losing to Google Search for over a decade, but with the integration of ChatGPT, Bing may offer the first compelling reason people might want to leave Google. The big questions are: how can ChatGPT improve Bing? And will it force Google to change its own search engine in response?
Microsoft is shot in the arm
News that Bing was considering integrating ChatGPT prompted investment bank DA Davidson to launch a hedge on Microsoft, with a price target 17% higher than the current price of $222.34.
“We believe integrating ChatGPT functionality into Bing could provide Microsoft with a once-a-decade opportunity to reverse Google’s dominance in search,” said analyst Gil Luria.
Luria added that although Bing is far behind Google, the integration of ChatGPT capabilities allows Bing to grow at much higher rates for search and advertising business. While Luria considers Google’s own forays into generative AI, he believes those projects haven’t made the same headway as ChatGPT.
Beyond using ChatGPT advances to improve Bing, Microsoft also wins because OpenAI runs on its Azure cloud.
“In the short term, we believe the unprecedented activity on OpenAI’s ChatGPT is translating into additional volumes in Azure,” Luria said. “We expect these levels to increase significantly with the introduction of GPT 4.0 later this year and the many product offshoots that will tie into OpenAI via APIs.”
DA Davidson estimates that OpenAI has annual spend of $250 million to $1 billion, with the majority spent on Azure.
As ChatGPT grew in popularity, some Google executives told Insider’s Tom Dotan that the underlying technology that powers ChatGPT – the Big Language Models – has inherent limitations, often exhibits poor responses, and is expensive to run.
However, reports from the New York Times said the company had declared a “code red” around ChatGPT and that management had held meetings in hopes of pushing for more generative AI-like products.
Can ChatGPT deliver? And will Google be forced to improve?
Google’s search product has come under intense scrutiny over the past few years. The Atlantic decried Google search “isn’t what it used to be” fast business say it’s getting worseand former Yahoo CEO and Google employee Marissa Mayer said the quality of Google Search is directly linked to a decline in the quality of the websites she has to visit, for example. Search Engine Journal. in August, Tech Crunch reported that Google has rolled out ways to improve the ranking of high-quality websites.
But ChatGPT has a long way to go before completely shaking up a legacy product, although some users said using ChatGPT yielded “frighteningly impressive” results. ChatGPT integration with Bing might even fail. As Morgan Stanley said in an analyst note, to really disrupt something, a competitor must come up with solutions that are ten times better than the second-best option. The new Bing powered by ChatGPT has extremely big shoes to fill.
But if Bing’s integration with ChatGPT takes off with Internet users, it could prompt Google to react and roll out its own natural language search feature.
Google is no stranger to the language models used by ChatGPT. The exact model ChatGPT runs on was created by former Googlers. The internet giant has its own language model called LaMDA, short for Language Model for Dialogue Applications. The model briefly went viral after a Google engineer claimed he was sensitive. (It was not.)
But Google also needs to think about the impact integrating natural language models would have on its overall business. Google relies on advertising and frequently inserts sponsored links into search results. The jury is still out on whether a natural language model supports this.
Yet for the first time since its launch in 2009, Bing, the perpetual second-best search engine that Once offered to pay people just to use itmight finally have a chance.
And with an investment in OpenAI and a bet on the burgeoning generative AI industry, Microsoft could finally force Google to compete if it wants to maintain market dominance.
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