Google to beef up search with AI, setting stage for showdown with Bing

By Supantha Mukherjee and Martin Coulter

STOCKHOLM/LONDON (Reuters) -Alphabet's Google on Wednesday said it will enhance search results with generative AI features, in its latest salvo against Microsoft which laid out plans a day earlier to improve its rival search engine Bing.

Microsoft is hoping new features can revive its Bing platform and take a shot at Google's dominance of online search which drives a lucrative ad business earning $100 billion in sales last year.

Adding generative AI to search results will create text or visual responses to prompts and enable users to interact with information in "entirely new ways", Google said.

"As we continue to bring generative AI technologies into our products, the only limit to search will be your imagination," Google's senior vice present Prabhakar Raghavan said at an event in Paris.

It was Google's second announcement this week. On Monday it unveiled its chatbot service Bard, but the launch has faced hiccups as Google's own online ad showed BARD delivering inaccurate answers.

Analysts said Google will be hoping it can prevent users switching to rival Bing.

San Francisco-based OpenAI, backed by Microsoft, opened up its ChatGPT chatbot for free public testing in November. It surged in popularity within days and Microsoft now plans to use the technology to power its Bing search engine.

Google's ad business is Alphabet's biggest earner, accounting for about 80% of the company's annual revenue.

Microsoft said it expects every percentage point of market share it gains will bring in another $2 billion in search advertising revenue.

As the use of artificial intelligence picks up, the European Union is gearing up to regulate it, through its AI Act.

Apart from search, Google also showcased a bunch of improvements to Maps, indoor views, image search and translation -- all using artificial intelligence in some form.

"AI is also making it far more natural to make sense of and explore the real world," Raghavan said.

(Reporting by Supantha Mukherjee in Stockholm and Martin Coulter in London;Editing by Mark Potter and Elaine Hardcastle)

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