REDMOND, Wash., (Reuters) – Microsoft Corp MSFT.O is revamping its Bing search engine and Edge Web browser with artificial intelligence, the company said on Tuesday, signaling its ambition to retake the lead in consumer technology markets where it has fallen behind.
The maker of the Windows operating system is staking its future on AI through billions of dollars of investment as it directly challenges Alphabet Inc’s GOOGL.O Google, which for years has outpaced Microsoft in search and browser technology.
Now, Microsoft is rolling out an intelligent chatbot to live alongside Bing’s search results, putting AI that can summarize web pages, synthesize disparate sources, even compose emails and translate them into more consumers’ hands. Microsoft expects every percentage point of share it gains will bring in another $2 billion in search advertising revenue.
Working with the startup OpenAI, Microsoft is aiming to leapfrog its Silicon Valley rival and potentially claim vast returns from tools generally that speed up content creation, automating tasks, if not jobs themselves. That would affect products for business, such as the cloud-computing and collaboration tools Microsoft sells, as well as the consumer internet.
“This technology is going to reshape pretty much every software category,” Microsoft Chief Executive Satya Nadella told reporters in a briefing at the company’s headquarters in Redmond, Washington.
The company’s share of search so far is about an estimated tenth of the market. Still, many investors see new technology as a win for all players. Microsoft’s stock closed 4.2% higher on Tuesday, while Alphabet gained 4.6%.
The power of so-called generative AI that can create virtually any text or image dawned on the public last year with the release of ChatGPT, the chatbot sensation from OpenAI. Its human-like responses to any prompt have given people new ways to think about the possibilities of marketing, writing term papers or disseminating news, or how to query information online.
Microsoft’s new Bing search engine is live in limited preview on desktop computers and will be available for mobile devices in coming weeks. The company hopes user feedback will improve its AI, which Microsoft officials said may still produce factually inaccurate information known as a hallucination. It meanwhile has pursued work to safeguard against misuse of its tech.
Underpinning the new Bing is what Microsoft is calling the Prometheus model – OpenAI’s most powerful technology informed as needed by real-time web data from Bing. That means Bing’s chatbot can brief consumers on current events, a step beyond ChatGPT’s answers that currently are limited to data as of 2021.
Jordi Ribas, Microsoft’s corporate vice president for search and AI, told Reuters the tech advances his team witnessed last summer emboldened the company to move ahead with an AI-infused Bing.
Microsoft’s chief financial officer also said OpenAI’s “new, next-generation” technology is powering its search engine, though officials declined to specify if this entailed the startup’s highly anticipated upgrade known as GPT-4.