Microsoft revamps Bing search engine and Edge browser with OpenAI

Microsoft might have us saying “Bing it” unironically within the year.

Microsoft’s Bing search engine and Edge Web browser are being revamped with artificial intelligence in an effort to retake the lead, or at the very least regain a serious competitive edge in consumer technology markets. In a move that directly challenges Google, Microsoft is staking its future on AI. 

Working with the startup OpenAI, Microsoft’s Bing will run on a new, next-generation “large language model”, a step beyond ChatGPT’s answers that currently are limited to data as of 2021. Underpinning the new Bing is what Microsoft is calling the Prometheus model – OpenAI’s most powerful technology informed as needed by real-time web data from Bing. The new Bing chatbot will also help users refine queries and even draft and translate emails. Microsoft is currently calling it the “AI-powered robot for the web.”

AI Is Challenging the Hierarchy in Big Tech

Microsoft’s decision to update its Edge browser will likewise intensify competition with Google’s Chrome competitor. For the quarter ended Dec. 31 2022, Alphabet reported $42.6 billion in Google Search advertising revenue, while Microsoft posted $3.2 billion from search and news advertising. Now, Microsoft says it expects every percentage point of market share it gains will bring in another $2 billion in search advertising revenue.

Bing is being talked about for the first time in years. Now, the chances of Microsoft dethroning Google in the volume of searches doesn’t seem like the complete fantasy it may have been just a few weeks ago. The gross margin of search is going to drop, perhaps forever, at which point Google might face an overhaul of its entire business model.

CEO of Microsoft, Satya Nadella said, “It’s a new day in search, it’s a new paradigm for search, rapid innovation is going to come,” adding that this new frontier could be Microsoft’s defining moment and a shifting of the Big Tech world order.

AI Competition Is Real and It’s Here to Stay

Big Tech’s biggest industry players are already a part of the AI tussle, and no one is expecting Google or Microsoft to give up without a fight. Google is already up next with its long-awaited ChatGPT rival, Bard, which is powered by LaMDA, a language model trained on dialogue they announced in May 2021.

Tech is changing so rapidly, and so is the industry competition. Lest we forget that there’s always the possibility other competitors will enter the search engine playing field. As big tech pulls ahead, small-cap firms building artificial intelligence tools are giving them a run for their money as retail investors pile in, opting to take up a much larger part of business than settling for a smaller piece at larger firms. 

Shares of SoundHound AI, which offers voice AI platform services, and Thailand’s security firm Guardforce AI have more than doubled in value so far this year, while those of analytics firm have seen a nine-fold rise. 

Of course, these smaller companies are competing against mega companies that have the scale, efficiency and capital to own the space. Regardless, it’s still a trend worth keeping an eye on. AI already gave Microsoft its Edge, who’ll be next? 


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