Microsoft is leading the AI race with ChatGPT and Bing, analysts say (2024)

New Delhi,UPDATED: Apr 27, 2023 09:52 IST

The world is talking about AI chatbots like ChatGPT, Google's Bard, and Microsoft's new Bing. Even though artificial intelligence (AI) is not a new concept, interest in the space peaked with the popularity of OpenAI's ChatGPT. The AI chatbot was unveiled in November 2022 and soon, it was all that people could talk about. Microsoft had partnered with OpenAI long back and in January this year, the two companies announced that they are strengthening their partnership further and are entering into a ‘multiyear, multibillion dollar investment’.

In February, Microsoft's new Bing was launched and the AI chatbot feature of the revamped search engine was being used by people across the world. Bing had its fair share of challenges at the time of its launch (it was being called out for gaslighting users, blackmailing them, and so on), but Microsoft worked on these issues and the complaints died down eventually. Soon, Bing also added an image generation feature, powered by OpenAI's DALL.E.

And now, reports say that Microsoft's investment in the AI space might have started paying off already. Analysts also say that Microsoft, with the likes of ChatGPT and Bing, is leading the AI space.

Microsoft leading the AI space

According to a Business Insider report, Microsoft's Chief Financial Officer, Amy Hood, said on a call with analysts that the company is expecting its cloud division, Azure, to generate revenue growth of 26 percent to 27 percent in the next quarter compared to the same quarter in the previous year.

Additionally, Hood mentioned that "roughly 1 point" of this revenue growth is expected to come from AI services.

Thus, Microsoft is expecting strong revenue growth from Azure in the upcoming quarter, and they expect that a portion of that growth will come from their AI services.

The Business Insider report also mentions that Wall Street analysts took this growth as a sign of Microsoft's investment in the AI space being fruitful, and even more growth will follow.

Bernstein analyst Mark Moerdler wrote in a note to his clients, "This is a huge number, and while AI has been part of the Azure story for years, for AI to already generate 1% incremental growth, shows that demand for AI — especially post the GPT announcements — is going to be a big driver of Azure."

He further mentioned that Microsoft, thus, could surpass Google in the AI space and Azure could be on its way of becoming 'a bigger and more important hyperscale provider' than Amazon Web Services (AWS).

The report also quotes Wedbush analyst Dan Ives saying that the AI story is still in the 'first innings' but, "Microsoft is leading this tech AI arms race."

Samsung to replace Google with Bing?

It was earlier reported that Samsung is mulling over the idea of using the new Bing as the default search engine on its devices instead of Google.

A New York Times report suggested that in March this year, Google got to know about the possibility of Samsung replacing Google Search as its default search engine on its devices and using Bing instead. The company 'panicked' at the possibility as it could mean losing an estimate of USD 3 billion in annual revenue.

The report also added that this gave Google some 'sleepless nights' and that the company is rushing to amp up its AI operations. According to internal documents viewed by the publication, Google is building a new search engine equipped with AI technology and will also be upgrading the existing one with AI-powered features.