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Tech giants Google and Microsoft report strong earnings, emphasize the importance of AI for the future of search

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Tech giants Google and Microsoft report strong earnings, emphasize the importance of AI for the future of search

Tech giants Google and Microsoft report strong earnings

Google and Microsoft have both reported strong quarterly earnings, boosted by their established search and cloud-computing businesses. But in their respective earnings calls on Tuesday, the tech giants emphasized the importance of artificial intelligence (AI) for the future of search.

Google executives downplayed the potential disruption of AI, emphasizing the company’s long track record as the world’s leading search engine. Meanwhile, Microsoft CEO Satya Nadella suggested that something much more dramatic is underway, and investors seemed to respond positively, sending Microsoft’s shares up almost 10% in extended trading.

Google’s dominance in the market for online search has been challenged by the debut of OpenAI’s chatbot, ChatGPT, which Microsoft has begun weaving into its Bing search engine.

The partnership has increased pressure on Google to reinvent its core search business to allow for more of the conversational exchanges that generative AI makes possible.

Billions of dollars in revenue could be up for grabs with even small changes in market share, and analysts say that Google’s core business is facing some of the most serious challenges it has encountered in quite some time.

However, Google’s CEO, Sundar Pichai, expressed optimism that users will continue to value online advertising even if their searches yield a summary composed by a large language model, rather than the familiar list of links that Google has long delivered.

He stressed that the company is investing heavily in AI and will be guided by data and years of experience about what people want and their high standards for quality.

As Google moves to incorporate generative AI into search, Pichai said the company would draw on its institutional knowledge. “We’ll test and iterate as we go because we know that billions of people trust Google to provide the right information,” he said. While Microsoft is seen as a formidable challenger, Pichai suggested that Google’s long track record and win-win partnerships with Android phone manufacturers will ultimately win the day.