- Boffa said Microsoft’s Bing update and ChatGPT technology give it an edge over Google in the AI search wars.
- ChatGPT’s popularity among consumers creates uncertainty for Google.
- Boffa said Google has been preparing for AI for years despite its advertising blunder this week and that it likely has better AI technology for search.
Microsoft emerged as the winner over Google this week as the two companies hosted presentations on their respective AI search technologies, with the latter mistakingly frustrating in a video. Still, Google has several key long-term advantages, according to Bank of America.
Microsoft highlighted a strong strategy and demo in its presentation, but Google “felt reactive with little new news, and even included an inaccurate AI chatbot response,” strategists said Thursday. Wrote in the note. “We think Google’s big reveal is yet to come, which we’ll expect in weeks, not months.”
Ever since OpenAI launched ChatGPT in November, the language bot has gone viral, and Microsoft announced a $10 billion investment in the company last month.
The tech giant this week rolled out a new version of its search engine Bing, which is now powered by ChatGPT and GPT-3.5, according to OpenAI CEO Sam Altman.
BofA said ChatGPT’s popularity among consumers — it has garnered 1 billion cumulative web hits since November — as well as the revitalization of Bing has created new uncertainties for Google.
Strategists said it is possible that Bing’s new technology could help it capture market share from Google, which has long been the dominant search engine. There is also potential for a revenue impact from renewed investment in Bing, higher industry search costs and AI-powered search results.
Ultimately, though, Google holds several key advantages in product and distribution over the long term, the bank said, and strategists reiterated a “buy” rating for its parent company, Alphabet.
“Despite the disappointment at the Paris press event, Google has been preparing for AI for years, we think Google has better AI technology for search, or at least better data,” the strategists wrote. It is likely to increase significantly in the next three months.
Plus, given the company’s strengths, Google should be able to offset higher AI search costs if they come to fruition, according to BofA.
The strategists wrote, “We have heard investor concerns over both Google’s search market share and cost calculations, however we are not aware of any search traffic changes or slowdown in Google search spend since chatGPT two months ago.” was launched.” “Investors are also wondering more about the value of Google’s search distribution deal with Apple, which may now have a higher perceived value for both Google and Microsoft.”