AI vs. Search Engines: Why Chatbots Are Losing the Query Game –

Artificial intelligence (AI) applications have the potential to revolutionize both higher-order tasks and daily touchpoints to a degree on par with the invention of the internet or the mass production of cars.
But while the generative AI solutions of today can take end-user experiences to the next level by providing deeper, more contextualized and personalized experiences, they haven’t been able to make much of a dent in one of the areas they are supposed to reinvent: search.
Microsoft’s addition of an AI-powered chatbot to Bing has reportedly gained it little market share among search engines, with the tech titan’s search platform holding steady at 3% of the market.
That’s a problem for Microsoft. Analysts estimate that the Bing AI chatbot, which is powered by an OpenAI large language model, needs at least $4 billion of infrastructure just to do its job, CNBC reported.
While the first-mover narrative this spring was that of Microsoft’s Bing versus Google’s Bard search tools, data from Statista in May showed that Bing accounted for 8.23% of the global desktop search market, while market leader Google had a share of around 85.53%.
Still, AI-driven chat interfaces remain a novelty for most internet users, whose search habits are firmly entrenched and centered around using Google as their gateway to the web.
As AI chat interfaces seek to chip away at these calcified behaviors, it remains to be seen what the future of search will look like — a list or a dialogue — and how brands and content producers will navigate the evolving landscape to their best advantage.
Read also: The Social Commerce Love Affair With AI
The high cost of maintaining AI platforms remains an uncomfortable reality that may force tech firms to prove the business value of their products sooner rather than later.
Certain estimates place the cost of a single ChatGPT query at 1,000 times that of the same question asked of a normal Google search, making the margins for AI applications smaller than other Software-as-a-Service (SaaS) solutions.
OpenAI spends up to $700,000 a day maintaining its underlying infrastructure and server costs, even as its user popularity drops.
When Bing’s AI chatbot was announced, Microsoft CEO Satya Nadella and other executives promoted its ability to serve users with hyper-personalized, dynamic search experiences such as comparing prices for products, planning meals, and developing travel itineraries rather than serving up a static list of options, The Wall Street Journal (WSJ) reported Thursday (Aug. 17).
And while merchants and brands may be ready for tech companies to make AI a core part of the shopping journeys for consumers, it remains to be seen whether consumers themselves are ready to make AI a core part of their journey.
The disruptive ability of today’s AI tools to move across multilayered data set “worlds” of images, speech, text and more is what makes today’s AI solutions worthy of being described as “intelligent.”
Tapping into this intelligence as it relates to the commercial occasion is where the value of AI for search will lie. But the jury is still out on whether AI-assisted search represents merely an incremental value add to an already streamlined and optimized, as well as successfully monetized, search experience — or something brand new entirely, from an experiential standpoint.
“A lot of what’s being done with large language models can actually go much further — not just improving performance but unlocking new business use cases [and even new businesses],” Jason Verlen, senior vice president at CCC Intelligent Solutions told PYMNTS in June.
Read more: Are Smarter Chatbots the Answer to AI’s Right-Now Utility?
As consumer expectations for personalization grow, organizations are increasingly hoping to exploit AI at scale, infusing the technology into the customer journey to optimize sales funnels and deliver a more relevant, immersive browsing experience that proactively contextualizes end-user needs rather than reactively responds to them.
But consumers need to wrap their heads around this new normal for it to live up to its transformative potential. And that may take some coaching.
“The power of good technology is its ability to hide all the complexities and simplify the interface for the user,” i2c CEO and Chairman Amir Wain told PYMNTS in June.
Activating the full potential of AI tools will require a grasp of the technology’s subtleties, he said, similar to the way novice Excel users often take “17 steps” to get somewhere, while an advanced user more fluent in the program’s macros can do the task in seconds.
“If not a skillset, it will at least be an exposure that people need to understand — how to best prompt the AI to get the appropriate answer,” Wain said.
Jeremiah Lotz, managing vice president of digital and data at PSCU, told PYMNTS in June: “Generative AI … will give a more unique conversation and get into more of a dialogue” and speed up daily life tasks by providing users with recommendations that are increasingly both tailored to their needs and dynamic based on the occasion’s context.
In its report, WSJ quoted Daniel Tunkelang, a search consultant who has worked with Google and LinkedIn, now owned by Microsoft, who said Microsoft’s AI-driven Bing platform is “cute, but not a game changer.”
To succeed commercially, other AI-driven products will need to escape that sentiment.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More