The maker of the chat applications GPT and Dolly, open AI, and Microsoft announced a multi-year, multi-billion dollar investment in each. The two companies already had a partnership, and last week, Microsoft CEO Satya Nadella said his company plans to incorporate open software into a range of its own products, from Microsoft Designer to the search engine Bing, which is seen as a potential threat to Google, which has dominated the search market for more than a decade.
There has been a lot of discussion about how AI, and chat GPT in particular, are going to upend search as we know it. Why does Observer believe there is potential there? Well, I think because one it's such a new thing when people started testing it when it launched in late very late November it was cool it was different you know you type in this any kind of question it gives Google, which we frequently use to search for information online or to learn more about something, was the obvious parallel, in my opinion. Azure infrastructure, which is significant for Microsoft.
They desire certain workloads and that Azure become the lead in AI, and this provides Microsoft these choices. In other words, Satya Nadella stated at Davos last week that they aim to integrate this technology not just into Microsoft's web search, which is a rival to Google, but also into all of their products, presumably including Word and Excel. What does it tell us about how Microsoft, in particular, sees the potential of this AI? Well, it's clear that they see it as Tremendously expensive for everything they have, rather than simply well maybe we can steal some share from Google in search, I suppose. They desire those workloads and want Azure to be a leader in AI, and it provides Microsoft with these choices. As Microsoft has a product that competes with Google's, Satya Nadella, the CEO of the company, stated at the World Economic Forum last week that they aim to integrate this technology across all of their products, including Word and Excel. What does it tell us about how Microsoft, in particular, sees the potential of this AI? Well, they certainly see it as X expansive for everything they have and not just well maybe we can steal some share from Google and search I believe they see it as X expansive for everything they have.
Although we haven't seen any major transactions or changes announced by the company, I believe that when chat GPT was released and all of a sudden there was this interest in it that Google inside executives were calling it a code reader. However, when you Google something, you don't always ask the same questions that people have been asking in chat GPT. I'm not using Google, so is the phrase "can you write me an essay on Dickens" truly an existential danger to what Google currently provides for its business model? In the short term, specifically, I believe the existential danger was probably overstated because Google makes the majority of its revenue from search adverts, which is referred to as monetizable search. However, not all searches, and particularly not all queries entered into chat gpt, function in this manner. If you ask chat gpt to clarify, can you? the same as the first, the majority of the same, for the majority of the majority that the ChatgPt has previously demonstrated that occasionally the information being spoken out is inaccurate and you can't trust it. What does it entail for total costs and the expense of integrating these AI technologies into current products, as it may not be as clear a revenue generator? What's Microsoft going to face when it does that is significant because just the computing power to run a chat gpt search versus a Google search has been estimated to be like seven times as much you know and that's just because this stuff is powered by these data centers with these like really expensive chips and memory that have to do this and the power consumption that comes from so I think Microsoft embeds more of this into its products and more across its services. I believe that both firms are in a bit of an arms race in this area, and as a result, their expenses will increase. Google will also have to deal with this issue since it will undoubtedly want to keep up with Microsoft. What does it mean for the cost per query analysis that search engines must perform when they're developing their products, specifically when a company like Google is building developing, and refining a search engine, it is clear that their top priority is to make this good information that gets people to what they want to do and that means they'll keep using it so if the world shifts more towards users wanting you to know AI in The timing of this right now and the reason this is kind of an important point is that we're seeing these corporations truly concerned about their expenses. In order to keep up with their results, Google will have to pay more for it.
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