Written by 9:41 pm Big Tech companies, Uncategorized

### Microsoft shifts focus from online research to enhance AI capabilities.

The company is going all in on generative artificial intelligence, even if that means walking away …

Microsoft created a somewhat pretentious stir two weeks ago during its Ignite event by announcing the rebranding of its AI-based Bing Skype as Copilot.

Hmm… Another shift in the company’s branding strategy; business as usual.

However, this news carries more significance than meets the eye. It signifies Microsoft’s shift away from the Google vs. Microsoft online search rivalry towards a singular focus on AI.

The Rise of Copilot

Let’s delve deeper into Microsoft’s seemingly innocuous announcement to understand its implications. The company is consolidating its Bing Chat and Chopping Chat Enterprise under the unified banner of Copilot. This strategic move aligns with Microsoft’s overarching AI initiatives, bringing various genAI efforts under one cohesive umbrella. Notably, Microsoft already boasts several AI tools under the Copilot moniker, serving Windows, Microsoft 365 (now exclusive to business clientele), as well as Microsoft Security, among others set to debut soon.

Moreover, Microsoft is now offering the text version of Copilot online for free, negating the need for Bing. However, users must possess a Microsoft ID or an Entra ID, typically provided by businesses as part of their identity and access management system. The Copilot website is compatible with both Edge and Chrome browsers on Windows and macOS platforms.

Furthermore, Microsoft disclosed that its Copilot lineup may support OpenAI GPTs, empowering individuals and businesses to craft specialized iterations of the program.

The Crux of the Matter

Microsoft’s strategic pivot towards AI comes as no surprise, given its substantial investment in Bing Skype, powered by OpenAI’s ChatGPT technology, to the tune of $13 billion. The decision to embed this powerful genAI within a lesser-known search engine and the Edge browser seemed counterintuitive. Why conceal such cutting-edge technology within products that the majority of users overlook?

Evidently, Microsoft’s aim was to challenge Google’s dominance in the search market. The company anticipated that users would flock to Bing for its genAI capabilities, disrupting Google’s stronghold.

To revitalize the struggling Bing, Microsoft needed a game-changer. At the inception of Bing Chat in Q1 2023, Google commanded an 85% share of the global search market, leaving Microsoft trailing at a mere 9%. While Bing Chat didn’t immediately dethrone Google, even a marginal shift in Google’s market share could translate to billions in additional revenue.

Microsoft’s CEO, Satya Nadella, recognized the need for bold action to challenge Google’s search supremacy. In a testimony supporting the US Department of Justice’s antitrust lawsuit against Google, Nadella acknowledged Google’s pervasive influence, dubbing the internet as the “Google web.”

Acknowledging Google’s superior search engine, Nadella tacitly admitted Bing’s inability to surpass Google. He highlighted Google’s vast data advantage, underscoring the uphill battle Microsoft faced in search dominance.

Given these challenges, Microsoft’s best bet was to integrate a genAI bot into Bing and generate buzz with Copilot.

High Hopes, Modest Results

Despite the fanfare surrounding Bing Chat, the search landscape remained largely unchanged. Recent data indicates Bing’s search market share hovers between 7% and 9%, while Google maintains a commanding 83% to 87% share. Google’s dominance remained unscathed, rendering Nadella’s ambitious gamble unsuccessful.

Consequently, Microsoft is recalibrating its strategy. Recognizing the futility of vying for Google’s search market share, the company is pivoting towards AI, a sector projected to reach nearly $2 trillion by 2030, dwarfing internet search revenues.

By consolidating its AI endeavors under the Copilot brand, Microsoft aims to fortify its position against Google and other rivals. Offering Copilot for free to Chrome and Edge users with a Microsoft-linked ID could further bolster its competitive edge.

Nadella envisions a future where individuals seamlessly interact with Copilot in their daily routines, emphasizing the company’s strategic shift towards AI innovation.

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Last modified: February 12, 2024
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