Title: Can ChatGPT AI Help Boost Microsoft’s Bing Search Engine?
Technology giant Microsoft, listed as MSFT on the New York Stock Exchange, has been at the forefront of artificial intelligence (AI) adoption in 2023. OpenAI’s ChatGPT, a generative AI platform, garnered widespread attention when it attracted over 100 million users within just five days. Microsoft’s investment in OpenAI has put it in direct competition with Google’s Bard-AI, developed by Alphabet Inc.
To leverage the growing interest in AI, Microsoft integrated a next-generation version of ChatGPT into its Bing search platform in March 2023. However, the question remains whether this integration can significantly impact traffic on Bing, the world’s second most popular search engine. Currently, Google dominates the search engine market with a commanding 93.37% share, while Bing holds a 2.81% share, followed by Yahoo! with 1.13%.
Bing’s relatively small market share can be attributed to its position as the default search engine on Windows. However, it does have a 38.46% share of the U.S. gaming console market because it is the default search engine for Xbox. In terms of mobile search, Bing ranks fifth. Nevertheless, Bing receives significant traffic from China and had 1.1 billion visitors in February 2023. Following the release of Bing ChatGPT, the platform surpassed 100 million daily active users and now handles over 900 million searches each day.
To strengthen its position in the AI space, Microsoft made a $10 billion investment in OpenAI at the beginning of 2023. As part of the investment, Microsoft will reportedly take 75% of OpenAI’s profits until the full $10 billion is recouped, and it will also own a 49% stake in OpenAI.
Microsoft has incorporated OpenAI’s ChatGPT features, including a more powerful and customized version for search, into Bing. The company developed a proprietary way of working with the OpenAI model, called Prometheus, to enhance the Bing search experience with more relevant and timely search queries. Microsoft also integrated ChatGPT into its Edge browser. As of June 2023, Google’s search engine market share decreased to 92.66%, while Bing’s fell to 2.76%.
During the Bank of America Global Technology Conference on June 7, 2023, Yusuf Mehdi, Microsoft’s Chief Marketing Officer and Corporate Vice President, discussed the vast opportunities presented by Bing. He highlighted the staggering number of daily search queries, around 10 billion, with nearly half remaining unanswered. Mehdi emphasized the potential of combining AI with Bing to solve complex queries and improve user experience. He also mentioned Microsoft’s strong partnership with OpenAI and the development of Prometheus, which allows access to large language models within the Bing search index. To increase Bing’s accessibility, Microsoft has included it on the Windows Taskbar, enabling 500 million users to have easy access to chat functionalities.
In addition to Bing ChatGPT, Mehdi showcased Bing Image Creator, an innovative tool that generates images based on user input. Users can simply describe what they envision and the tool will provide a picture. Users can then customize the image further, adjusting features such as shape and color.
Analyst Timothy Horan from Oppenheimer reiterated his Outperform rating on Microsoft on May 3, 2023, with a price target of $330. He specifically highlighted Microsoft’s integration of AI as a driving factor for its success. Horan’s analysis showed that while Microsoft’s Azure grew by $914 million in the first quarter of 2023, competitors such as AWS experienced shrinkage, suggesting Microsoft’s dominance in the hyper-scale cloud market will continue to grow, particularly with the inclusion of Azure OpenAI.
In summary, Microsoft’s integration of ChatGPT AI into its Bing search engine has the potential to significantly impact user traffic and enhance the search experience. With the growing adoption of AI and Microsoft’s strategic investments in OpenAI, the company is well-positioned to compete with the likes of Google in the search engine market. By leveraging the power of AI, Microsoft aims to solve unanswered search queries and provide users with more timely and relevant results, while also expanding its offerings in the cloud market through Azure OpenAI.
