Microsoft CEO Satya Nadella is perfectly aware Google has had an edge on his company for a long time now, but A.I. might present a new battleground for the older company to outshine its rival once again.
Since OpenAI launched ChatGPT in November, Google has been on a “code red” as the advanced chatbot threatens to disrupt its domination of online search. A.I.-enhanced search could be a game changer, and Nadella is welcoming the challenge to compete as Microsoft prepares to roll out its own A.I.-enhanced search engine.
“Today’s announcement is all about rethinking the largest software category there is: search,” Nadella said in an interview with The Verge published this week, after he and OpenAI founder Sam Altman jointly announced a new A.I.-powered version of its search engine, Bing, on Tuesday.
Nadella has been happy to pile the pressure on the traditionally dominant Google this week, which may have more to prove—and more to lose—as the A.I. wars heat up.
“At the end of the day, [Google is] the 800-pound gorilla in this,” Nadella told The Verge. “I hope that, with our innovation, they will definitely want to come out and show that they can dance. And I want people to know that we made them dance.”
Nadella said the integration of A.I. heralds a new generation for the search market, and represents a “platform shift” where “you get to reimagine pretty much everything.”
The A.I.-powered version of Bing is not yet available to the public, although there is a wait list while it is being rolled out to testers. And there’s no doubt that the race to successfully release an A.I.-powered search engine to the public has begun. Nadella hopes to give Microsoft another shot to compete with Google, which this week unveiled its own A.I.-enhanced search engine, Bard, which is powered by Google’s LaMDA, a large language model similar to ChatGPT.
Like Microsoft’s forthcoming A.I. search engine, Bard is currently available to testers and will be released to the public “in the coming weeks.”
The A.I. battleground
A.I. research used to be a slow and meticulous process for tech giants, but OpenAI changed everything with its wildly successful launch of ChatGPT just a few months ago.
Google has been researching how to integrate A.I. with its products for years, as have Meta and Apple. But much of the work from tech titans has been focused on the ethics and safety of A.I., while OpenAI’s model prioritized transparency and easy public access to products like ChatGPT, even if it means working out some of the kinks after a wide release.
An outlier among Big Tech was Microsoft, which may have an edge on its competitors after first investing in OpenAI as far back as 2019. Microsoft has invested about $3 billion since then, and last month announced a new $10 billion deal that will effectively put it in control of the artificial intelligence startup until it becomes profitable and is able to pay back the original investment plus interest.
That may well put Microsoft in the driver’s seat when it comes to A.I., and put Google in a difficult situation as its search dominance comes under threat, something Nadella seems to be fully aware of.
“It’s a new race, and it’s a new race in the most important software category, or the largest software category, which is search,” Nadella said in an interview with CBS published Wednesday, adding that Google is the company to beat for Microsoft and OpenAI.
“Let’s face it, Google dominates [search]. We are thrilled to be here launching Bing to compete,” he said.
Ousting Google from its search engine hegemony would certainly be a tall order. The company’s market share of the search engine industry currently stands at around 93%, according to analytics firm Statcounter, while Bing comes in at second place with slightly over 3%.
But as things stand, Microsoft could still be set for some important gains in the search engine space after Google’s Bard failed to inspire much confidence this week when it made a factual error in a promotional video that wiped over $100 billion off the company’s market cap.
Google’s shortcomings and Microsoft’s strong week with the press could see the latter company “challenge the web search market by grabbing market share as users see increased benefits and a new user experience,” Wedbush tech analyst Dan Ives wrote in a research note Wednesday.
Ives later called Bard’s mistake a “black eye” for Google in a Friday note, an error that puts Microsoft in the lead this week in the A.I. wars as investors expressed concern over Google’s efforts in the race.
“From a PR perspective, this was a mini disaster with the Street now worried about Google’s A.I. efforts going forward and defending its bread-and-butter dominant search business,” Ives wrote.
