It’s been a dissatisfaction that’s been simmering for well over a decade.
Back in June 2009, a bespectacled 42-year-old Senior Vice President at Microsoft (NASDAQ: MSFT) announced the launch of Bing, the Redmond company’s answer to Google’s popular search engine.
That man was Satya Nadella, Microsoft’s current CEO.
While Bing made some early inroads, it hardly made a dent in the widespread use of Google.
And it’s not even close.
According to Statcounter, Google’s global market share is near 93%, while Bing is not able to muster even a 3% share.
Things came to a boiling point earlier in February this year.
As Nadella revealed Microsoft’s new ChatGPT-powered Bing search engine, he couldn’t resist taking a dig at the top dog [bolded for emphasis]:
“Today was a day where we brought some more competition to search.
… I’ve been at it for 20 years, and I’ve been waiting for it.
I hope that, with our innovation, they [Google] will definitely want to come out and show that they can dance. And I want people to know that we made them dance, and I think that’ll be a great day.”
It was a surprising choice of words coming from the Redmond company CEO.
A 14-year grudge unleashed
Within the tech industry, Nadella stands out for his reserved leadership style.
And that made his next statement all the more revealing.
During an interview with the Verge, he made a rare admission: on Windows, Google made more money than all of Microsoft.
Now, that’s a statement you don’t hear every day from a leader.
In simple terms, it didn’t matter that Microsoft Windows holds a dominant market share on desktop computers.
For all its bluster, Google, which is owned by Alphabet (NASDAQ: GOOG), handily outpaced the Redmond company when it comes to making money off the Windows platform.
Google’s search engine, which accounts for the majority of Alphabet’s revenue, was the crown jewel minting money for the Mountain View company.
This truth’s gotta hurt.
While Microsoft has done well for itself since the launch of Bing, the pain of losing out to its peer even as it holds the keys to Windows OS was like a pebble in its shoe.
That’s why Nadella was not shy in inviting Google to the dance.
As far as invitations go, it’s a grudge he has been holding on for almost 14 years.
Something had to give.
The iPhone moment
The launch of ChatGPT was a wake-up call for Google.
Until then, the Mountain View company was widely regarded as one of the frontrunners in the field.
Deepmind, which is owned by Alphabet, received worldwide acclaim for creating AlphaGo, a deep-learning based software that defeated the best players in the ancient game of Go.
It was a monumental moment.
The game of Go, which is popular in China and Korea, is enormously complex and the number of possible moves is said to exceed the number of atoms in the universe.
In other words, computers will not be able use “brute force” to outmanoeuvre its human opponent.
Instead, the AI would have to be trained to be more human-like in its approach.
Yet, for all the plaudits, Alphabet was missing the key ingredient, the one product or solution which would make AI accessible for the masses.
That’s when ChatGPT came along and upset the apple cart.
Some, including Nvidia (NASDAQ: NVDA) CEO Jensen Huang, have called ChatGPT’s introduction the “iPhone moment”.
It was the pivotal point when the centre of gravity shifted from desktop to mobile.
Along with it, Microsoft’s Windows was overshadowed by the rise of Apple’s (NASDAQ: AAPL) iOS and Alphabet’s Android.
Nadella knows full well that Microsoft’s desktop OS is no longer the most important platform.
It’s another reason why he is hell bent in winning the battle for the next, most relevant computing platform.
But for all his bravado, don’t expect Alphabet to give up easily.
The empire strikes back
Nadella may have made the most noise around Bing’s challenge on Google search but in truth, the war for AI supremacy is being fought at multiple fronts.
Last week, the Google I/O event marked the next stage of the race.
Alphabet is matching Microsoft blow for blow, in several instances, raising the bar for what’s possible.
First, there was the introduction of the PaLM 2 language model, its answer to OpenAI’s GPT-4.
Crucially, PaLM 2 is already powering 25 new products and features within Google.
These range from Workspace, a feature to help you write in Gmail and Google Docs, to Med-PaLM 2 and Sec-PaLM 2, two industry-specific language models designed for healthcare and security use cases, respectively.
The above is a hint that the battle won’t be just about Redmond versus Mountain View.
Google also introduced Bard Extensions, its answer to ChatGPT plugins.
Partners such as Adobe (NASDAQ: ADBE) are already integrating Bard extensions with Adobe Firefly, the former’s family of creative generative AI models for producing high-quality images.
Other early adopters are varied, including Booking Holdings’ (NASDAQ: BKNG) Kayak and OpenTable, Walmart (NYSE: WMT), the Khan Academy, Wolfram, Zillow (NASDAQ: ZG), Uber (NYSE: UBER) Eats, TripAdvisor (NASDAQ: TRIP), Redfin (NASDAQ: RDFN), Spotify (NYSE: SPOT) and more.
The trend is clear, in our eyes.
This list will only grow longer for both Microsoft and Alphabet.
More importantly, the battlelines drawn will not just be between two tech giants but a whole host of other companies vying for a sliver of an emerging, important market.
Get Smart: The endless waltz
“The future is already here — it’s just not evenly distributed.”
We’re blessed in Singapore, where internet connection allows us to go beyond our borders and find new opportunities before they arrive on our shores.
It’s our chance to “live in the future”.
Case in point: by the time Netflix (NASDAQ: NFLX) was offered in Singapore in 2016, I was already invested in the company for nine years, following every business development within the online streaming company.
Similarly, I invested in Amazon (NASDAQ: AMZN) long before it made its debut in our island city.
The opportunity to learn and invest is within our grasp.
Are we really ready to live in a world with AI that could potentially take over our jobs? Check out our latest Special Free Report on this fascinating topic. We cover the latest developments in AI and how they could impact your life and investments. Click here to download a copy now.
Disclosure: Chin Hui Leong owns shares of Adobe, Alphabet, Amazon, Apple, Booking Holdings, Microsoft and Netflix.