Microsoft is all in on artificial intelligence (AI) for a very simple reason: it believes its lead in the technology will make it the tech world’s top dog again. Microsoft is far behind Google in search and browsers, but it believes AI can help it eat into that lead, or even make Microsoft dominant.
The stakes couldn’t be higher. Microsoft CFO Amy Hood recently told analysts that a single percentage point of market share in search advertising is worth $2 billion. In the first quarter of 2023, Google had an 85% search market share, compared to 9% for Bing. So, there’s a lot of upside for Microsoft to reap billions if it can edge closer to Google. And that’s just in search. Microsoft sees more billions in additional AI-driven money in the cloud, productivity tools and more.
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