Microsoft and Google are locked in a renewed race to develop and deploy AI to supercharge their search and productivity tools. As they report earnings, investors will likely be looking for any early indications of how much those efforts are helping Microsoft and hurting Google.
Shares of Google-parent Alphabet fell earlier this month after a report sparked concerns that its core search engine could lose market share to AI-powered rivals, including Microsoft’s Bing.
Last month, Google employees learned that Samsung was weighing making Bing the default search engine on its devices instead of Google’s search engine, prompting a “panic” inside the company, according to a report from the New York Times, citing internal messages and documents. (CNN has not reviewed the material.)
Google’s search engine has dominated the market for two decades, with Bing struggling to gain market share. But the viral success of ChatGPT, which can generate compelling written responses to user prompts, appeared to put Google on defense for the first time in years.
Microsoft, meanwhile, has invested in and partnered with OpenAI, the company behind ChatGPT, to deploy similar technology in Bing and other productivity tools.
But both companies face risks as they invest in generative AI. Google was called out after a demo of Bard provided an inaccurate response to a question about a telescope. Shares of Google’s parent company Alphabet fell 7.7% that day, wiping $100 billion off its market value.
Microsoft’s Bing AI demo was also called out for several errors, including an apparent failure to differentiate between the types of vacuums and even made up information about certain products.
