Chat GPT is a fascinating technology that has the potential to upend the entire internet economy. We’ll explore how this could be Microsoft’s chance to make Bing Relevant and to make Google Obsolete at the same time.
What is Chat GPT?
ChatGPT is a conversational AI language model developed by OpenAI. It was trained on a diverse range of internet text, allowing it to generate human-like responses to a wide range of questions and prompts.
The service is currently free to use, if you’d like to log in and available to try out directly from OpenAI . They also have a paid tier of the service where you get priority access during peak traffic times. When the service is very busy, Open AI will not allow too many users to use the service at the same time. We have not seen a similar issue arise with ChatGPT powered Bing Search.
What does Chat GPT Powered Bing Look Like?
Microsoft recently announced that it was integrating Open AI’s Natural Language Processing technology, Chat GPT in with their Bing search engine.
Bing opened a beta version of the changes to the public, which you can sign up for the waitlist by going to bing.com/new . Even over the last couple of weeks the interface has changed a couple of times from having a dialogue box on the right side of search results to having an embedded chat box at the bottom of the initial search screen like the screenshot below.
An interesting twist is that Microsoft’s Chat GPT powered version of Bing cites its sources which are linked at the bottom. This is a big step forward for Natural Language Processing, as the initial form of Chat GPT synthesizes data but does not give you any indication of where the information is coming from.
How does using New Bing Compare to Chat GPT?
Once you have an account setup for Chat GPT powered Bing, or New Bing as we’ll call it the results are mixed. The initial search page often looks the same as the old site, but you can swipe down from the top of the page to show an expanded search prompt.
Here’s an example of what Bing results look like compared to Open AI’s Chat GPT:
Results from New Bing Search powered by Chat GPT:
Results from Open AI’s Chat GPT:
Comparison of Open AI Chat GPT And Bing Chat GPT
While Bing’s interface is visually more inviting, the results are very vague and are more pointed at giving you sources and links for information that providing any actionable insights or useful information.
Hovering over the primary information in the search box gives you a list of links that you could have gotten from Google or traditional Bing Search.
We have to say that it’s fairly disappointing and underwhelming in this instance. Open AI’s Chat GPT model puts a focus on providing information, which Bing seems to be more concerned with providing links to other sites. This is likely to help preserve their business model and ad revenue.
The Search for Revenue will Likely Limit GPT’s usefulness in major search
Our primary takeaway is that ad revenue seems to be winning the war vs providing insights and information that is truly useful. Hopefully this changes as Microsoft continues to work through the right feature mix while New Bing is in beta.
How Will Google Answer Microsoft’s Chat GPT Powered Bing?
Google made over $209 Billion from Ad Revenue in 2021. The most recent full year reported as of writing. Of course, Google and Alphabet as a whole have other services like selling subscriptions to Google Docs, Gmail, Google Cloud Services, and some more far out bets like Self-Driving cars with Waymo.
None of these other services come close to the amount of money made generating ad revenue, and many of their long-term bets are subsidized by money made in the ad business.
Let’s see what $209 billion in ad revenue looks like for an end user of their free to use search service. When placing a Google Search for Home Insurance the majority of top results are all sponsored ads. Meaning that the content and result placement is based on who is willing to pay the most in the Google Ads auction system at the time of search.
Compare this with the results from Chat GPT regarding who has the best Home Insurance. You’ll immediately notice a few key differences.
- Chat GPT answers your question while Google presents you with Ads
- Chat GPT makes digging through search results irrelevant
- Chat GPT answers your question in less space than it takes Google to Serve Ads
How Does Micrsoft Make Money?
Microsoft makes most of its money by selling software subscriptions, software licenses and computer or gaming hardware.
On a revenue basis for Full Year 2021, Microsoft only received 6% of it’s revenue from Ad business, compared to Google’s 82%
The disparity in business model highlights how much of a threat Chat GPT is for Google and what it could mean to provide search results without publishing ads around them. Even a small reduction in the number of ads being displayed with an AI powered search engine would be a big blow to Google’s business model.
Would a Chat GPT Powered Bing Search be Good for Microsoft?
The Ten Billion Dollar question for Microsoft is that if it switched Bing to provide Chat GPT powered answers, would they have a way to make up the revenue? It’s hard to imagine a company giving up that many high margin advertising dollars.
There are a couple ways that Microsoft could try and monetize the service.
Microsoft Could place Sponsored ads into Chat GPT results.
This would be fairly annoying for users but the most likely. People are already used to having to go through search results buried in ads to get answers. This method at least eliminates the need to dig into search results.
Co-mingle Chat GPT results with the existing search experience
Perhaps the easiest way for Microsoft to integrate Chat GPT into Bing Search would be to place the synthesized answer at the top of the search results page, similar to what it already does for common questions. If the chat bot doesn’t answer the questions that searchers are looking for then they can move on to the regular search results below with ads inter-mixed.
Google Could Follow the Same Monetization Methods mentioned above, but they have a lot more on the line than Microsoft. The vast majority of their business is at risk if they get it wrong while Microsoft has so many other revenue streams that the impact wouldn’t be nearly as significant.
What is Google’s answer to OpenAI’s Chat GPT?
Google hasn’t announced anything official at this point but you can be assured that they are working on it. Google’s parent company Alphabet has an AI focused subsidiary called DeepMind with several different research areas all branching out of the core competencies of AI and Machine Learning. One such branch is AlphaCode which is able to solve open ended computer programming challenges with astonishingly decent accuracy and ranks above many human programmers.
OpenAI’s Codex platform is intertwined with Chat GPT and competes directly with AlphaCode.
It would be shocking if Google didn’t already have the technology ready to launch or near ready.
The biggest question of all is, how does Google integrate a Natural Language Processing Solution without cannibalizing their existing Ad revenue cash cow?
We will have to wait and see what Google does.
How will the Internet Adjust to Chat GPT?
Much of the internet and content that’s created is designed to maximize current pay per click and various other monetization methods. Google and Microsoft give content creators a share of the revenue they receive from advertisers.
In a post Chat GPT world, many people could find the answers they’re looking for without having to click on 3rd party pages. The removal a click is also the removal of revenue for a content creator under the current system.
There’s no way to know if people would stop creating content altogether without a way to monetize it through search. The only certainty is that change is coming, and Chat GPT being integrated into search may be one of the biggest changes ever to the internet economy.
The Battle of Chat GPT powered Bing vs Google is Taking Off!
Things are heating up in the race for AI Powered Web Search.
2/6/2023 – Google CEO Sundar Pichai Announces Bard a rival to Chat GPT
As a leader in Artificial Intelligence, and Machine learning it’s no surprise that Google recently announced a competitor to Chat GPT based on their LaMDA technology. For the moment Google will be testing the product internally to fine tune it and open the API to a select set of developers to begin testing. Their ultimate goal is to use LaMDA to back a new AI program named Bard.
Google announces new AI program named Bard (msn.com)
Google’s AI projects thus far are known for using incredibly large data sets for training their models. While Microsoft is one of the biggest tech companies on the planet and owns many large web communities to train AI on, Google is a leader in scraping the internet to feed it’s search engine model.
It will be fascinating to compare the two products as soon as they’re fully available to the public.
2/7/2023 – Microsoft Announces Chat GPT Powered Search Results in Bing
Not to be outdone by Google, Microsoft has announced that Bing will begin to include Chat GPT powered search results! If you’d like to try Bing Powered by Chat GPT you will have to sign up for the preview and can access it by going to https://www.bing.com/new
It’s very early stages and both companies appear to be moving at lightning speed. As soon as Google can figure out how best to monetize the new technology you can expect to see it in their search results soon.
2/9/2023 – Google Announces Bard Competitor to Chat GPT
Only a couple days after Bing announced that they were moving forward with integrating Open AI’s Chat GPT software into Bing Search, Google held their own press conference to highlight the progress they have made with their competitor Bard.
During the demonstration, their new AI solution did not produce meaningful results only highlighting how far Google currently is behind Bing in this space. As a reaction to the bad news $100 billion of Market Cap was immediately erased from Google’s stock price.
Google’s AI chatbot, Bard, sparks a $100 billion loss in Alphabet shares : NPR
Over the next couple of days it has become clearer that Google is much further behind Microsoft in this space than initially thought. Google is a natural leader in search and AI, but employees have been noted describing the situation as a Dumpster Fire.
Google employees criticize CEO for “dumpster fire” response to ChatGPT | Ars Technica