• by Laurie Sullivan  @lauriesullivan, April 6, 2023

Advancements in artificial intelligence will transform the way people search online. It led Microsoft to develop and integrate AI-chat technology into its search engine Bing and computer browser Edge. Now Alphabet and Google CEO Sundar Pichai said the company will integrate its conversational AI technology, Bard, into search.

The news comes days after Pichai hinted to the Financial Times that Google would integrate the chat technology into its virtual assistant.

Pichai plans to steer the technology to more company applications, the Wall Steet Journal reported Thursday. “The opportunity space, if anything, is bigger than before,” Pichai told the WSJ.

Google has long been a leader in developing search and computer programs supported by large language models (LLMs). These models can process natural-language prompts and respond to them with humanlike answers.

AI technology requires immense computing power. Nonetheless, Google is testing several new search products, such as versions that allow users to ask follow-up questions to their original queries. The company already began testing features in Gmail and other work-related products, similar to Microsoft, which now offers the technology in its business software tools.

Similar to Microsoft, which financially invested and built models based on OpenAI’s ChatGPT-4, Google wants to influence and change the way people use search, something Pichai told the WSJ would change. 

With advancements and investments in conversational AI made by Microsoft, Pichai must face a looming threat to Google’s core business as he gets pressure from investors to cut costs. That pressure led Alphabet in January to agree to cut about 12,000 jobs, 6% of staff. He also set a goal in September in 2022 for the company to become 20% more productive.

The company will the most organic searches also wins with advertisers. Search ads remain the biggest revenue generator for Google, bringing in $162 billion of revenue last year. Statista estimates Microsoft generated around $11.59 billion in revenue from search advertising.

Microsoft has been more aggressive when it comes to integrated AI technology into its services, specifically search. In a move to lessen the gap between Microsoft and Google search and advertising services, Microsoft in February integrated its AI-chat technology into Bing. The move allowed users to engage in extended conversations with the product.

In March, Microsoft said it would bring more ads to Bing and Edge. Yusuf Mehdi, Microsoft corporate vice president, wrote in a post that the company is collaborating with publishers to drive more traffic to websites, which in turn should increase revenue. Mehdi said he wants Microsoft to pioneer the future of advertising in these new media.

Microsoft told the WSJ it expects to generate $2 billion in revenue for every percentage point it gained in the search market, of which Google has a more than 90% share.