Microsoft Corporation MSFT CEO Satya Nadella highlighted Bing's strong growth countering concerns about its minimal impact on Alphabet Inc.’s GOOG GOOGL Google's global search dominance.
What Happened: On Tuesday, during a conversation with a CNBC Overtime anchor Jon Fortt, Nadella was asked when AI was integrated into Bing, the hope was to gain more share from Google.
However, one year down the line, Google still has roughly 90% of the global search share. In response, the Microsoft CEO said that Bing search is one of the fastest-growing businesses, showing strong double-digit growth.
When asked about search share, Nadella responded that it’s a game of 100 basis points, and any progress is good.
He then expressed excitement about the success of OpenAI’s ChatGPT and its partnership with Apple Inc. AAPL, which he said is beneficial for Microsoft as it runs on Azure.
“That's all incremental for even us,” Nadella stated, adding, “We are giving them the Bing index and powering ChatGPT search using our APIs.”
Regarding the relationship with OpenAI, Nadella expressed satisfaction with the partnership’s progress.
“We are thrilled to be an investor. We're thrilled to be a partner around I.P. They're one of our biggest customers now. We also compete in some areas. And so the partnership has all of those dimensions to it,” he said.
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Why It Matters: Microsoft launched Bing in 2009 to compete directly with Google. However, despite its efforts, Google remains the dominant player, with Bing capturing less than 10% of search queries.
Meanwhile, the partnership between Microsoft and OpenAI has been a topic of interest in the tech world, especially since reports started surfacing about OpenAI’s shift from a nonprofit to a for-profit model.
Microsoft has invested nearly $14 billion in OpenAI since 2019, leading to a high-stakes financial and governance tug-of-war. OpenAI’s valuation soared to $157 billion in its latest funding round.
Earlier in May it was reported that OpenAI’s potential agreement with Apple had sparked concerns within Microsoft.
Last month, Microsoft’s first-quarter earnings reported a 16% year-over-year increase in revenue.
Price Action: Microsoft shares rose 0.49% on Tuesday, closing at $417.79, with a slight additional gain of 0.05% in after-hours trading, reaching $418 at the time of writing, according to data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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