REDMOND, Wash. — Microsoft is incorporating artificial intelligence into its Bing search engine and Edge Web browser, the company announced on Tuesday, signalling its desire to retake the lead in consumer technology markets where it has lagged.
The maker of the Windows operating system is betting billions of dollars on artificial intelligence as it directly competes with Alphabet Inc’s Google, which has long outpaced Microsoft in search and browser technology.
Microsoft is now releasing an intelligent chatbot to live alongside Bing’s search results, putting AI that can summarise web pages, synthesise disparate sources, and even compose and translate emails into the hands of more consumers. Microsoft anticipates that every percentage point of market share gained will generate an additional $2 billion in search advertising revenue.
Microsoft is collaborating with the startup OpenAI to leapfrog its Silicon Valley rival and potentially claim vast returns from tools that speed up content creation, automate tasks, if not jobs themselves. This would have an impact on both business products such as cloud computing and collaboration tools sold by Microsoft, as well as consumer internet.
“This technology is going to reshape pretty much every software category,” Microsoft CEO Satya Nadella told reporters at the company’s Redmond, Washington headquarters.
So far, the company’s search market share is estimated to be one-tenth of the market. Nonetheless, many investors see new technology as a win-win situation for all parties. On Tuesday, Microsoft’s stock rose 4.2%, while Alphabet’s rose 4.6%.
The public first became aware of the power of so-called generative AI, which can generate virtually any text or image, with the release of ChatGPT, OpenAI’s chatbot sensation, last year. Its human-like responses to any prompt have given people new perspectives on marketing, writing term papers, disseminating news, and searching for information online.
Microsoft’s new Bing search engine is now available in limited preview on desktop computers and will be available in the coming weeks on mobile devices. The company hopes that user feedback will help to improve its AI, which, according to Microsoft officials, may still produce factually incorrect information known as a hallucination. Meanwhile, it has worked to prevent the misuse of its technology.
The Prometheus model — OpenAI’s most powerful technology informed as needed by real-time web data from Bing — is at the heart of the new Bing, according to Microsoft. That means Bing’s chatbot can inform users about current events, going beyond ChatGPT’s answers, which are currently limited to data as of 2021.
Microsoft’s corporate vice president for search and AI, Jordi Ribas, told Reuters that the technological advances his team witnessed last summer encouraged the company to move forward with an AI-infused Bing.
Microsoft’s CFO also stated that OpenAI’s “new, next-generation” technology is powering its search engine, though officials declined to specify whether this included the startup’s highly anticipated GPT-4 upgrade.
Microsoft intends to market OpenAI’s technology, including ChatGPT, to its cloud customers and incorporate the same capabilities into its entire suite of products, not just search.
According to Gartner analyst Jason Wong, Microsoft’s “partnership with OpenAI is more relevant for its business customers in the near term,” but it could offer “disruptive opportunities” in consumer businesses as well.
“With the exception of gaming, Microsoft has not been a leader in key consumer technologies such as search, mobile, and social media,” he continued.
Nonetheless, Google has taken note of Microsoft’s challenge. On Monday, it unveiled its own chatbot, Bard, and it plans to release its own AI in search that can synthesise material when there is no simple answer available online.
Microsoft’s decision to update its Edge browser will increase competition with Google’s Chrome rival. However, the Redmond-based company anticipates that the updated Bing will eventually be available in other browsers.
According to Daniel Ives, an analyst with Wedbush Securities, the search rivalry is now among the biggest in the technology industry, as OpenAI positions Microsoft to increase its 9% share at the expense of Google.
Alphabet reported $42.6 billion in Google Search and other revenue for the quarter ended December 31, while Microsoft reported $3.2 billion in search and news advertising revenue.
Microsoft executives stated that the new Bing would alter how people search for information on the internet.
A chatbot, for example, can assist users in easily refining queries and providing more relevant, up-to-date results.
Rather than simply spitting out links to websites, the AI-powered search engine would be able to provide clear answers in plain language by synthesising what Bing found on the web and in its own data vaults. Queries about current events would rely more on real-time data from the internet.
During a press conference, Microsoft Consumer Chief Marketing Officer Yusuf Mehdi demonstrated how the AI-enhanced search engine could also make shopping easier. He demonstrated how Bing could estimate, for example, whether a specific type of seat would fit in the back of a car by combining web data on one’s vehicle dimensions and the shopping product in question.
Bing’s AI can present takeaways of financial results or other web pages within the Edge browser, Microsoft said, aiming to save readers from having to make sense of a long or complicated document. It can also imply computer code.
Microsoft’s plan to invest in supercomputer development and cloud support is driving these efforts, allowing OpenAI to release even more sophisticated technology and aim for the level of machine intelligence imagined in science fiction.
The outcomes of this collaboration are already visible beyond search. Microsoft announced last week that the startup’s AI will generate meeting notes in Teams, its collaboration software, as well as suggest email responses to vendors who subscribe to its Viva Sales subscription.