While half of search queries can be answered perfectly well with a few web links or a short answer, Microsoft is betting big that AI-powered responses can better address the other half — potentially giving its Bing search engine a fresh chance to take on Google.
What they're saying: "Half of the 10 billion queries are going unanswered today, or at least without very good answers," longtime Microsoft executive Yusuf Mehdi told Axios in an interview Tuesday.
Driving the news: Microsoft detailed its plans Tuesday to add a more powerful version of the AI engine behind ChatGPT to both Bing and the Edge web browser.
- Microsoft says it has tuned OpenAI's latest engine for search and is also using internally developed AI tools to improve standard Bing results.
- The new Bing is in a limited public preview now, with plans to open up deeper access to millions of users in the coming weeks.
- The Edge browser will offer new AI-powered features including summaries of web pages and a writing assistant.
The big picture: Any profound change to the search business has the potential to upend the lucrative economics that have built Google's empire.
- That business has grown up around the idea that there are multiple answers to any question and search engines deliver a mix of links, including ones paid for by advertisers.
- The business model may shift with longer, chat-based results, but Mehdi predicted that ultimately both consumers and advertisers will benefit from the opportunity for more relevant ads.
OpenAI-powered search results also cost more to serve up, especially in the short term.
- Mehdi, Microsoft's corporate VP and consumer chief marketing officer, said that Microsoft will control those costs to a degree by being selective about which types of queries it uses AI to answer.
Between the lines: As the distant challenger to Google in search, Microsoft stands to benefit from a shake-up in the search business, Mehdi said.
- "We can afford to be more innovative and disruptive on experience," Mehdi said.
Of note: Unlike ChatGPT, Microsoft is offering citations with its answers, allowing people to fact-check the AI-powered answers they receive. That could also make the shift in search results more palatable to the publishers whose information Bing is relying on.
- Mehdi said Microsoft is also using Bing's vast knowledge of the Web to make its answers more reliable than those served up by ChatGPT, helping to address a key shortcoming of that system — that it can be confidently wrong.
Yes, but: Google isn't standing still. The company on Monday previewed its own plans to add AI to its search results — as well as a homegrown ChatGPT rival — and is holding an event Wednesday to announce other improvements it is making across search, maps and other areas.
What to watch: It's too early to know whether Microsoft will seize a lasting edge or the new AI competition becomes the kind of technical arms race that Google has historically been able to win.
