Microsoft and Google Are Dancing The Tango
In an interview with The Verge, Satya Nadella, CEO of Microsoft, said:
“(…) I hope 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’s clear Microsoft is taunting — playfully, but serious at the same time. Their partnership with OpenAI has provided them with a unique opportunity to take a shot at their biggest competitor, market leader and search colossus, Google.
Two competitors, one spotlight
The two companies battled for the news cycle this week and it was adorable to watch.
Minutes after Google announced their AI assistant ‘Bard’ in a blog post, Microsoft announced they were revealing something big on Tuesday, February 7, during a surprise event. It led Google to announce their own surprise live stream event a day later on Wednesday, February 8, showing the world how it is “using the power of AI to reimagine how people search for, explore and interact with information.”
Microsoft had already made clear the company’s strategy is to integrate OpenAI’s technology further into their products and services. So it came to no one’s surprise when they announced their newly AI-enhanced Bing search and Edge browser. What was exciting to see was how far they had progressed and how far they were ahead of their main competitor.
Google’s surprise event lasted less than 40 minutes. We got to see a sneak peak of Bard, their supposed answer to ChatGPT, and they presented a handful of newly added features to Google Search. Nothing was showcased that couldn’t have waited until their yearly I/O event in May and the whole thing felt very… artificial.
The innovator's dilemma
In all fairness, Google is in a tough spot. Bret Kinsella wrote a great article on the ‘innovator’s dilemma’, explaining how market leaders tend to react slowly, because they must always balance new opportunities without impairing the value they have already created. Google owns 90% of the search market share. Microsoft’s Bing on the other hand has never been able to seriously compete. Basically, it means Google has everything to lose — and Microsoft has everything to win.
Sufficiently pressured by the media attention OpenAI and Microsoft were able to generate together these past few months, Google felt the need to act. However, the surprise event proved to be disastrous. Especially when it was reported that there was inaccurate information in a response generated by Bard. Within a 24-hour time span, Google’s stock fell nearly 8%, erasing more than $100 billion in market value.
Seeing that, one could argue that Nadella’s wish already came true. Google was made to dance, and boy, did they look stiff.
Caught off-guard
The billion-dollar question at the core of all of this remains: does Microsoft have what it takes to take on Google?
Some people argue that Google has been caught sleeping behind the wheel, but personally I don’t buy that. Google more or less invented Transformer-architecture, the technology that sits at the heart of large language models that power these products and they acquired DeepMind in 2014, a company that is responsible for producing some of the most cutting-edge research in AI. Ergo: Google knows, they know exactly what’s possible.
So, why didn't they ship something like ChatGPT? Was it a lack of product vision? Perfectionism?
The most logical (and boring) answer is that they haven’t figured out how to make it safe and therefore reliable. With a reputation of being the almost-universal, single source of truth and information in the world (and a business model that relies on that reputation), they have to be 10x or even 100x more careful than any competitor when sending a new technology out into the wild.
And I bet Microsoft hasn’t figured out how to make it safe and reliable either. Because, you want to know the funniest part? Neither party gave the public access to their new products: Google’s Bard is only accessible to a limited number of testers and Microsoft’s AI-powered Bing came with a waiting list.
All this fuzz was aimed to win over the public’s perception. From behind our computer screen, we, the audience, watched them perform: a tango between two technology giants.
The dancing has just begun.
Jurgen Gravestein is a writer, business consultant, and conversation designer. About 4 years ago, he stumbled into the world of chatbots and voice assistants. He was employee no. 1 at Conversation Design Institute and now works for the strategy and delivery branch CDI Services helping companies drive business value with conversational AI.
Reach out if you’d like him as a guest on your panel or podcast.
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