Microsoft Corp is revamping its Bing search engine and Edge web browser with artificial intelligence, the company said on Tuesday, in one of its biggest efforts to lead a new wave of technology and reshape the way people gather information.
Microsoft is betting its future on AI through billions of dollars in investment as it directly challenges Alphabet Inc’s Google. This could mean new competition for business users using cloud and collaboration products, as well as a strong return to consumer markets where Google now leads.
By working with startup OpenAI, Microsoft aims to leapfrog its rival and potentially claim big returns from tools that accelerate all kinds of content creation, automating tasks, if not the jobs themselves.
“This technology will reshape almost every category of software,” Microsoft CEO Satya Nadella told reporters at a briefing at Microsoft headquarters in Redmond, Washington.
Some investors expect the technology to create new markets even as big tech companies vie for dominance. Microsoft shares were up 3.8 percent in afternoon trading, and Alphabet was up 3.6 percent.
The power of so-called generative artificial intelligence, which can create almost any text or image, was brought to the public’s attention last year with the release of ChatGPT, a chatbot sensation from OpenAI. His human answers to any query gave people new ways to think about the possibilities of marketing, writing term papers or breaking news, or even how to search for information online.
The new Bing search engine is available in limited preview on desktop and will be available for mobile devices in the coming weeks.
Bing will be powered by artificial intelligence and work on a new “big language model” that is more powerful than ChatGPT, Microsoft Consumer Marketing Director Yusuf Mehdi said. The chatbot will help users to more easily refine queries, provide more relevant, up-to-date results, and even make shopping easier.
Bing is far behind Google in search market share.
Microsoft now intends to bring OpenAI technology, including ChatGPT, to its cloud clients and add the same power to its suite of products, including search.
In the short term, “a partnership with OpenAI is more relevant to its business users,” said Gartner analyst Jason Wong. Still, he said, it could offer “disruptive opportunities” in consumer businesses as well.
“Apart from gaming, Microsoft has not been a leader in key consumer technologies, such as search, mobile and social media,” he added.
Google has taken note. On Monday, it unveiled its own chatbot called Bard, while it plans to release an AI for its search engine that can synthesize material when there’s no simple answer online.
Microsoft’s decision to update its Edge browser will increase competition with Google’s Chrome browser.
The search rivalry is now among the biggest in the industry, as OpenAI positions Microsoft to increase its 9 percent share at Google’s expense, said Daniel Ives, an analyst at Wedbush Securities.
At the event, Mehdi demonstrated how an AI-enhanced search engine will make shopping and email creation easier. The demonstration showed how Bing can estimate, for example, whether a certain type of sofa can fit in the back of a car by gathering web data about the dimensions of a person’s vehicle.
For the quarter ended Dec. 31, Alphabet reported $42.6 billion in Google search and other revenue, while Microsoft posted $3.2 billion in search and news advertising.
Behind Microsoft’s OpenAI partnership is its plan to invest in supercomputer development and cloud support so the startup can release more sophisticated technology and aim for the level of machine intelligence dreamed of in science fiction.
The fruit of this work, however, is more immediate. Last week, Microsoft announced that the startup’s AI would generate meeting notes in Teams, its collaboration software, as well as suggest email responses to vendors using its Viva Sales subscription.