Gates says the rise of AI threatens Google’s search engine profits

  • Bill Gates said in a podcast that Google’s search engine profits could fall if Microsoft jumps into AI.
  • Gates said AI is the “biggest thing this decade” and could reshape the tech space.
  • Microsoft has unveiled an AI-powered Bing to challenge Google’s dominance in search engines.

Bill Gates – the co-founder of tech giant Microsoft – said Google’s profits from its search engine are likely to fall in the future because the company he co-founded was able to quickly shift its focus to artificial intelligence.

Speaking on a Monday episode of In Good Company, a podcast hosted by Norway’s sovereign wealth fund boss Nicolai Tangen, Gates said: “Google owned all the search profits, so search profits are going to go down, and their share of that may have gone down , because Microsoft was able to move pretty quickly.”

For comparison, Google recorded $224 billion in ad revenue in 2022 — far dwarfing Microsoft’s $18 billion in ad revenue.

In early February, Gates told Forbes that AI was “just as important as the PC, as the Internet.” On the podcast, he admitted he was surprised at how AI development has accelerated over the past year, but said it will be the “biggest thing this decade.”

His comments came two weeks after Microsoft unveiled an AI-powered version of its Bing search engine that poses as a challenge to Google’s search dominance.

Google has dominated search for the past two decades, accounting for about 93% of the global search engine market, according to web analytics service Statcounter, while Bing accounts for about 3%.

Just as Microsoft launched Bing, Alphabet – Google’s parent company – also introduced an AI service called Bard. Both the new Bing and Bard are open to trial users.

While Gates said on the podcast that he’s “not sure” there will be a winner from the AI ​​race, at least one prominent analyst — Wedbush’s Dan Ives — said that Microsoft is “leading the pack” in the AI ​​race right now .

Eventually, what Gates envisions for the integration of AI in search engines is a “personal agent” that understands users’ needs and style – replacing the need for separate services from different tech companies, as is happening now when Google dominates search , Amazon owns the shopping, Microsoft owns productivity tools and Apple owns the gadget market.

“In 10 years, we won’t be looking at these companies separately because the AI ​​will know you so well that when you’re shopping for gifts or planning trips, it won’t care if Amazon has the best price and others have a better price – you.” don’t even have to think about it,” Gates said on the podcast. “So it’s quite a dramatic potential reshaping of how tech markets look.”

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