This is a golden opportunity as it rarely happens in the business says Satya Nadella.
After years of watching Google (GOOGL) dominate the search engine market, the Microsoft CEO believes he finally has a chance to disrupt that dominance and become a major player in the next generation of search engines powered by artificial intelligence (AI).
Already an investor in OpenAI, the firm that developed the ChatGPT conversational robot, Microsoft announced on February 7 that it would directly integrate chatbot features into its Bing search engine.
The big change is that now when consumers search with Bing their queries will receive exact answers to the questions asked, instead of the current collection of links. Up to now, a user has had to scan the links and click on the ones that most likely would answer the question posed.
'Paradigm Shifts'
Microsoft hopes that this big difference with Google will encourage more consumers to use Bing. The company will also integrate ChatGPT features into other businesses, including Azure, its cloud division. A move, Microsoft hopes, will give it an edge over Amazon and Google in this business segment.
Microsoft's offensive has put Google on the defensive. Google has announced Bard, a rival to ChatGPT which is not yet available to the general public. In an interview with CNBC on Feb.7, Nadela confided his enthusiasm for this opportunity to finally be able to shake up Google. Here is an excerpt from his responses.
He was asked how long it will take Microsoft to compete with Google since he said that it's "new day for search" and that the "race starts today."
"These paradigm shifts or platform shifts are a great opportunity for us to innovate," Nadella responded. "It's more a priority for us to say what, how can we rethink what search was meant to be in the first place. In fact, Google success in the initial base was by reimagining what can be done in search."
"I think the AI era that we're entering gets us to think about it and that's what really motivates [us]. And what you saw today does really build a not just a new search experience, but thinking of it as what's a co-pilot for the web look like in this AI era. It's what's exciting."
The chief executive officer didn't hesitate when asked about the economic opportunity of this "new era."
"Well, I mean, we already have an at-scale search business, even though (...) it's very, very small. The good news is we start in with already a business that is profitable. And here's the interesting thing. The most profitable large software business is search. So I look at this and say, 'Look, I just have to follow the one user at a time."
He added: "I never ever felt this liberated in terms of opportunity in the days ahead. So I'm really excited about innovating, meeting the needs knowing that the search categories, the most profitable and large category. Just on Windows, Google makes more money on Windows and all of Microsoft. So that alone should sort of give us the impetus to really go out."
Nadella was asked to explain the strategic importance of AI compared to previous breakthroughs like cloud during his 9 years as Microsoft's CEO.
Bubble?
"One of the things I think a lot about is you can only be relevant in technology if you are good enough to see the waves of change and then to reorient your technology and innovation agenda and the business model," he responded. "The last one we went through was obviously the mobile and cloud. We got one, we missed one. But the contribution was very hard."
He added that: "The one good thing here is the business model side of this because it builds on the cloud. So one of the foundational things about AI [is] who knows how it will reshape all software categories, you know."
"But I'm much more optimistic in terms of both our capability to lead from day one versus having to do that catch up, which we don't do in some cases."
He concluded that he has not seen an innovation and an excitement like AI "since I would say 2007-2008 when the cloud was just first coming up."
Nadella's remarks reflect the ongoing enthusiasm around AI. It's the buzzword.
But many experts warn against the formation of a possible bubble.
