AI: OpenAI also dancing in AI Search
...now both Microsoft & OpenAI looking to make Google 'Dance'
Well, it looks like OpenAI is likely to join Microsoft to separately make Google ‘Dance’, a wish memorably articulated by Microsoft CEO Satya Nadella a year ago. As the Information explains in “OpenAI Develops Web Search Product in Challenge to Google” highlighting both CEO Sam Altman and CTO Mira Murati:
“OpenAI has been developing a web search product that would bring the Microsoft-backed startup into more direct competition with Google, according to someone with knowledge of OpenAI’s plans.”
“The search service would be partly powered by Bing, this person said.”
“The Takeaway”
• “An OpenAI search app would be a direct assault on Google”
• “The move comes after AI search startup Perplexity gained early traction”
• “Microsoft’s Bing has failed to dent Google’s market share”
This development of course is not a surprise, but an acceleration on a full plate for OpenAI in 2024. The Information provides more context:
“The move to launch a search app comes a year after Microsoft CEO Satya Nadella said his company would “make Google dance” by incorporating artificial intelligence from OpenAI into Microsoft’s Bing search engine. That partnership has failed to dent Google’s search dominance.”
“It isn’t clear whether the search product would be separate from ChatGPT, the chatbot OpenAI runs and which also uses Bing’s index of the web to retrieve information to answer some questions. But ChatGPT, which runs in Microsoft’s data centers, isn’t as fast as Google in answering questions. OpenAI could be looking to speed up the service, which can be slow because it also does tasks like proofreading email drafts, generating poetry or computer code.”
“If OpenAI launches the search service, it would further heighten its rivalry with Google, which has scrambled to catch up the startup in conversational AI. OpenAI relied in part on ex-Google employees to launch ChatGPT, and some of those employees previously developed machine learning models used by Google’s search engine. The companies continue to compete fiercely for talent.”
Of course Microsoft hasn’t given up its ambitions in Search with Bing and Copilot. As the Information continues, Bing Search is still a muti-billion dollar business for Microsoft, even with a search market share in the low single digits:
“After Microsoft tried using OpenAI’s technology to drive consumers to its Bing search engine a year ago, Google’s stock price temporarily dipped. At the time, Microsoft CFO Amy Hood told investors that each percentage point of market share that Bing could get from Google would be worth $2 billion in ad sales to Microsoft. But Bing’s market share hasn’t changed much.”
“Traffic to OpenAI’s ChatGPT, on the other hand, grew steadily for much of last year. It isn’t clear how OpenAI would make money from a search product, but Microsoft’s advertising business already generates more than $18 billion annually, most of which comes from Bing.”
Such are the stakes in Search, pre-AI.
I still view Google as well-positioned to hold and extend their lead in AI generated Search, as I’ve articulated in detail. As I said back last August,
“AI powered Search built into Google Search now with SGE (Search Generative Experience) and Bard now, and Gemini soon. It’s all going to be more than ‘Good Enough’. Even if ChatGPT remains the technically better mouse trap.”
“Habits matter. Especially habits ingrained for hundreds of millions and billions. They’re hard to change for the mainstream. Not to mention all the partners with an economic stake in the current ecosystem. And almost impossibly expensive. “
And of course, Google has kept up the AI pace, especially with the Gemini announcements a few days ago, transitioning Google AI branding from Bard and other LLM AI efforts to Gemini.
But the AI dance floor is getting more crowded, with OpenAI, Microsoft, and Google ramping up their AI game as discussed earlier, in the AI Tech Wave.
The media of course will continue to focus on this ‘tortoise and the hare’ race they like to frame. And we’re likely to all be beneficiaries of the dance contest underway. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)