Microsoft begins integrating a new language-learning artificial intelligence on search engine Bing to turn the table against long-time competitor and search engine titan Google.
The abilities of the AI include web content summaries, information synthesis from various sources, and email generation, with a shortcoming of occasionally churning inaccurate data known as hallucinations.
On Tuesday, Microsoft's stock price increased by 4.2% while Alphabet, Google's parent company, increased by 4.6%. The final quarter report from last year shows Google and Microsoft with $42.6B and $3.2B in revenue, respectively.
The revenue distribution will likely change as Wedbush Securities Analyst Daniel Ives says that Microsoft will grow its current 9% market share by chipping away at Google. Microsoft also expects a $2B revenue per market share gain from advertising.
Unveiling the Prometheus Model
Microsoft's Chief Financial Officer disclosed that instead of ChatGPT, Bing is using a "new, next-generation" technology. Additionally, Prometheus Model surpasses ChatGPT, which has no access to data beyond 2021.
"A new, next-generation OpenAI large language model that is more powerful than ChatGPT and customized specifically for search. It takes key learnings and advancements from ChatGPT and GPT-3.5 – and it is even faster, more accurate and more capable," states Microsoft.
Prometheus focuses on safety by acting as a filter for fake news and inappropriate content. It also considers the relevance of the data by factoring in the source location, contextual clues and the date of the information to fine-tune accuracy.
Microsoft declined to comment when asked if the update is OpenAI's highly anticipated GPT-4. However, Microsoft states that the Prometheus model “led to the largest jump in relevance in two decades."
The Implications of AI
The reason Bing is a threat to Google is that it generates a short text of synthesized data instead of merely listing links of websites that most likely utilize Search Engine Optimization (SEO).
This new approach to search results means dismantling the SEO business, which would result in a domino effect on all adjacent industries like marketing and sales.
Search engines aside, AI will lead to faster turnover rates because of lightning-speed content creation and automation. Microsoft Chief Executive Satya Nadella adds, "This technology will reshape almost every software category."
Gartner Analyst Jason Wong points out that the "disruptive opportunities" presented by Microsoft's partnership with OpenAI are relevant to business customers but could extend to regular consumers.
Wong explains, "Except for gaming, Microsoft has not been a leader in key consumer technologies, such as search, mobile and social media."
Microsoft and OpenAI in a Glance
In 2019, Microsoft invested $1B in OpenAI and began a partnership to develop Azure, Microsoft's cloud computing service. OpenAI announced that Microsoft would be its "preferred partner" for commercial AI.
Fast forward to 2022, Microsoft Corporate Vice President for Search and AI Jordi Ribas told Reuters that this was the pivotal moment when Microsoft decided Bing would use AI. Ribas and his team were amazed by OpenAI's developments.
Before that year ended, OpenAI dropped ChatGPT on the public, amassing one million users in less than a week and 100 million users in two months. Microsoft added a $10B investment in January and another exclusive partnership for ChatGPT.
As a response, Google shifted its priorities and is working on various AI developments, with Bard in the lead. According to Google, Bard generates an original answer by synthesizing existing information when no direct response is available.
Where Bing is Headed
Microsoft Consumer Chief Marketing Officer Yusuf Mehdi explains that the new Bing will transform many search practices. He explains that Bing can simplify financial reports and recommend programming codes.
Mehdi also adds that Bing will revamp the online shopping experience. For example, Bing can answer whether a car seat will fit by comparing your vehicle's data with that of available products.
Besides the Prometheus-powered AI behind Bing, Microsoft is also using ChatGPT in Teams to automate meeting notes and generate emails for its Viva Sales subscribers.
Currently, the upgraded search engine is in limited preview on desktops. Microsoft intends to make AI-infused Bing available to mobile and other browsers in the future. It also wants to incorporate AI in the rest of its products and services.