The rivalry between Google and Microsoft has become more intriguing with Microsoft’s decision to invest heavily in OpenAI and incorporate its powerful AI chatbot into its Bing search engine. Both technology leaders have been investing heavily in AI for years, but with this latest move, Microsoft is hoping to capture more of the search engine market share from Google.
Alphabet’s subsidiary, Google, has been the dominant player in the search engine industry for over a decade, with a market share of 90% on internet-connected devices. The company has been immensely profitable due to its holding of the search engine market, but it now looks like that may be challenged with Microsoft’s aggressive AI push. Microsoft has invested $10 billion into OpenAI and is providing its cloud computing infrastructure service (Azure) to the start-up, while Bing is now also utilizing OpenAI’s ChatGPT tools, with many media outlets noting that Google is “nervous” about its suddenly formidable competition.
Google has not been sitting idly in the face of Microsoft’s move. The search engine giant is determined to protect its valuable market position, launching its own ChatGPT response, Bard, as well as similar AI tools on Google Workspace that rival what Office 365 customers can access. Google appears prepared to offer a competitive response to Microsoft’s AI-driven search engine offerings and as of now, it is estimated that Bing only holds a 2.81% share in the global market compared to Google’s 93.37% share.
Further, Google has been investing in AI for years and its most prominent AI research institution, DeepMind, was acquired by the company back in 2014. Google has continually worked to improve its search capabilities, introducing AI into its search results on properties such as YouTube and Google Maps. For example, when users search on Google, they can now get results from exact timestamps in YouTube videos.
Clearly, Microsoft will need to do more if it wants to gain any significant market share from Google. The search engine giant has a prominent user base and a vast array of free products like Google Chrome, Android, and Google Maps that makes switching search engine providers difficult. Still, investors should keep an eye on the battle for search as Alphabet faces additional competition from social media applications like TikTok and Instagram for much younger users, who may be less interested in traditional search engine capabilities.
