Google and Microsoft, the two Search Engine providers, announced new AI Innovation

The James Webb space telescope cost US$10 billion (£8.3 billion) to build. Still, it cost Google more than US$160 billion after the search engine's new chatbot answered a question about it incorrectly. Google and Microsoft both announced plans for AI-enhanced search, ushering in a new era in the artificial intelligence space race.

When the error appeared in a demo, the launch of the former's new chatbot, Bard, went wrong. The competitor to the Microsoft-backed ChatGPT was asked about the telescope and one of the answers displayed said it "took the very first pictures of a planet outside of our solar system". Experts and investors alike were quick to spot the error. Alphabet, Google's parent company, lost US$163 billion in value. The company is still worth more than US$1 trillion, thanks in large part to its dominance in search.

Microsoft announced that it would be enhancing its Bing search engine and Edge web browser with the technology behind ChatGPT, developed by the San Francisco-based company OpenAI. The company, which announced a multibillion-dollar investment in OpenAI, stated that the technology, which is based on a more powerful version of ChatGPT, would assist users in refining queries more easily, providing more relevant, up-to-date results, and making shopping easier. The new-look Bing will be publicly available in a few weeks, and users can sign up for an early access waiting list. After the OpenAI deal and the runaway success of ChatGPT, Google knew it had to respond.

The company announced that Bard was undergoing specialist testing and would be made more widely available to the public in the coming weeks. Google CEO Sundar Pichai stated that the technology behind Bard would be integrated into its search engine shortly, citing the example of asking a new-look Google whether the piano or guitar is easier to learn. The Telescope response received the most attention, along with a lackluster presentation on Google's latest AI-powered search plans in Paris. Microsoft is also unlikely to avoid mistakes similar to those made by James Webb. Indeed, ChatGPT users have reported inaccuracies while interacting with the chatbot, the technology which powers the new-look Bing and other Microsoft products such as Teams.

According to experts, large language models, which serve as the foundation for Bard and ChatGPT, are prone to errors due to how they are built. These models are fed datasets containing billions of words, which train the AI to generate plausible responses to queries.

Like predictive text, they construct a model to predict the most likely word or sentence to follow the user's prompt. However, the phenomenal popularity of ChatGPT, which gained more than 100 million users in two months, demonstrates a significant public appetite for an AI-enhanced search experience. Fans of the chatbot have praised its ability to summarise documents, clean up prose, and write code (among other things), while journalists who have seen early previews of the new AI-powered Bing have been impressed.

According to Microsoft, each percentage point of market share gained presumably from Google represents an additional US$2 billion in advertising revenue for the company, referring to the lucrative business of ads placed in search results. Microsoft said this week that Bing's AI-enhanced ability to understand queries with "greater depth" and gain insights into users through "deep conversational engagement" would be appealing to advertisers. Google concurs. There is a significant gap to close between the companies: in its most recent quarterly results, Microsoft reported US$3.2 billion in revenue from search and news advertising, while Google reported US$42.6 billion in search revenue.