Microsoft is making big waves with their $10 billion investment in OpenAI, maker of the ChatGPT product that’ll power Microsoft Bing AI search. Their announcement (linked below) says it’ll reinvent search. In a research note last week, BofA Global Research head Candace Browning said this about the Microsoft AI search wars:
The product strategy and demonstrations at Microsoft’s AI press event this week proved superior to that of rival Google’s. Microsoft has invested billions in ChatGPT, in part to bring users a revamped Bing search engine.
ChatGPT reached the 100m consumer mark in one-third the time it took TikTok and 10x faster than Instagram! Billions well spent. Right?
Maybe. Here’s another point worth considering.
Microsoft AI search may have made a large splash with its use of ChatGPT to power Bing and Edge, but look at the pool it cannonballed itself into.
Google maintains 92% of search engine market share as of January 2023. The remaining 8% are split 50/50 between Bing (Microsoft) and “others” (Yahoo, etc.). This level of market share dominance will be tough to break, even with ChatGPT fever.
Browning also offers the following:
Google has been preparing for AI for years and likely has superior AI technology for search. We expect product visibility to increase significantly over the next three months and believe Google can offset higher AI search costs with cost cuts elsewhere.
So don’t discount Google and its Bard AI search just yet. While we may be a bit drenched from Microsoft’s most recent splash, the search engine pool still belongs to Google and there’s no telling what AI-powered pool tricks Bard has up his
– Below are Bofa Global Research stock price targets for both Microsoft and Alphabet-Google.