Washington's REDMOND, Feb. 7 (Reuters) - Microsoft Corp. (MSFT.O) announced on Tuesday that it is integrating artificial intelligence into both its Edge Web browser and Bing search engine in an effort to regain market leadership in the consumer technology space.
Microsoft, the company behind the Windows operating system, is directly competing with Alphabet Inc.'s (GOOGL.O) Google, which has long surpassed Microsoft in search and browser technology, by investing billions of dollars in AI.
Now that Microsoft is releasing an intelligent chatbot to coexist with Bing's search results, more users will have access to AI that can summarise web pages, synthesise many sources, even create emails and translate them. Microsoft anticipates an additional $2 billion in search advertising revenue for every percentage point of market share it increases.
By collaborating with the firm OpenAI, Microsoft hopes to surpass its Silicon Valley adversary and possibly reap significant financial benefits from technologies that accelerate the development of content by automating chores, if not actual jobs. That would have an impact on both consumer internet use and commercial solutions like Microsoft's cloud computing and collaboration tools.
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At a press conference at the company's headquarters in Redmond, Washington, Microsoft CEO Satya Nadella said, "This technology is going to change pretty much every software category."
The company currently controls an estimated tenth of the search market. However, a lot of investors believe that new technologies will benefit everyone. Alphabet gained 4.6% on Tuesday, while Microsoft's shares ended the day 4.2% higher.
With the introduction of ChatGPT, the chatbot sensation from OpenAI, the public first became aware of the ability of so-called generative AI, which can generate almost any text or image. People now have new ways to consider the possibilities of marketing, producing term papers, sharing news, or how to query information online thanks to its human-like reactions to every demand.
On desktop computers, Microsoft's new Bing search engine is currently active in limited preview. It will soon be made available for mobile devices. Microsoft officials stated that the company's AI may still provide factually incorrect information known as a hallucination, thus it is hoped that user feedback would help it develop. It has continued to work on measures to prevent technology abuse in the interim.
What Microsoft refers to as the Prometheus model, which is OpenAI's most potent technology and is informed as necessary by real-time web data from Bing, is the foundation of the new Bing. This means that Bing's chatbot may update users on current happenings, which is a step forward over ChatGPT's replies, which will only provide data as of 2021.
Microsoft's corporate vice president for search and AI, Jordi Ribas, told Reuters that the technological advancements his team saw last summer gave the company confidence to proceed with an AI-infused Bing.
The search engine at Microsoft is powered by "new, next-generation" technology from OpenAI, according to the company's chief financial officer. However, officials declined to say whether this referred to the startup's eagerly awaited GPT-4 upgrade.
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Microsoft wants to promote OpenAI's technology, such as ChatGPT, to its cloud clients and incorporate the same strength across the board, not only in search.
JD.com of China intends to use ChatGPT techniques into its goods and services.
According to Jason Wong of Gartner, Microsoft's cooperation with OpenAI is more pertinent for its commercial customers in the near future. However, he added, it might also present "disruptive opportunities" in consumer businesses.
He continued, "With the exception of gaming, Microsoft has not been a leader in critical consumer technologies, such as search, mobile, and social media.
Google has nonetheless noted Microsoft's challenge. It revealed its own chatbot, named Bard, on Monday. It also plans to release an AI for search that can create content when there are no straightforward answers available online.
Microsoft's plan to upgrade its Edge browser will also make Google's Chrome rival more competitive. The Redmond-based business anticipates eventually making the improved Bing available for other browsers.
According to Daniel Ives, an analyst with Wedbush Securities, the competition in the search market is currently one of the fiercest in the technology sector as OpenAI positions Microsoft to increase its 9% market share at Google's expense.
Alphabet claimed $42.6 billion in revenue from Google Search and other sources for the quarter that ended on December 31, whereas Microsoft reported $3.2 billion in sales from search and news advertising.
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The new Bing, according to Microsoft executives, will alter how people locate information online.
For instance, a chatbot can make it easier for users to refine their queries and get more relevant, current answers.
Instead of just spouting links to websites, the AI-driven search engine would be able to provide concise explanations in plain language by synthesising what Bing discovered online and in its own data repositories. Current-events queries would make more use of online live data.
Microsoft Consumer Chief Marketing Officer Yusuf Mehdi illustrated how the AI-enhanced search engine may help make shopping simpler during the news briefing with reporters. He demonstrated how Bing might gather information from the web about a person's vehicle measurements and the shopping item in issue to assess, for instance, whether a specific style of seat could fit in the back of a car.
According to Microsoft, Bing's AI may give summaries of financial reports or other web pages within the Edge browser, saving readers from having to decipher a lengthy or complex document. It may also allude to computer code.
Microsoft's commitment to invest in supercomputer research and cloud support is what's driving these initiatives, allowing OpenAI to deploy ever more advanced technology and strive for the degree of artificial intelligence envisioned in science fiction.
Results of this partnership are already being visible in areas outside of search. In a previous week's announcement, Microsoft said the startup's AI would create meeting notes in Teams, its collaboration software, and make email suggestions to vendors who subscribe to Viva Sales.