The Google-Microsoft AI tussle could be a windfall for Apple

The Google-Microsoft AI tussle could be a windfall for Apple

The new AI arms race will first play out on all-too-familiar battlefields: the world’s favorite search engines.

Developers working on Microsoft’s latest version of Bing, which they recently made available to a cohort of testers, have amped up the previously second-rate search engine with a version of OpenAI’s ChatGPT software. Soon, when users trawl the internet with Bing, they will get not only the customary ranked list of search results but also a right-hand panel in which an AI engine extracts details from the results, summarizes information, and responds to follow-up questions.

It isn’t perfect yet, wrote Kevin Roosethe New York Times’ technology critic, who had the chance to play around with this souped-up tool. But, he added, “I’m switching my desktop computer’s default search engine to Bing.”

Google has been the world’s unquestioned choice of search engine for decades now, so abandoning it feels like a momentous step. To be sure, Google’s own engineers will aim to incorporate their own chatbot—Bard—into their search function. But Bard’s debut on Feb. 6 showed that it is perhaps less launch-ready than ChatGPT.

As a result, in this suddenly open space, Microsoft has a chance to steal a march over Google on one of the most prized pieces of tech real-estate in the world: the default search bar on Apple’s iPhones, iPads, and Macs.

The multibillion-dollar cost of being Apple’s default search engine

For years, Google has been paying to ensure that its search engine is built by default into Apple devices. The cost is formidable. Analysts estimate that Google paid as much as $10 billion in 2020 and $15 billion in 2021. But Alphabet must reckon that the price is worth it, if Apple users—who tend to be wealthier—can drive towards Google a greater portion of the $100 billion in revenue that search advertising generates every year.

Until now, Bing’s share of the search market has languished in the single digits, while Google enjoyed a dominant 92%. But if Microsoft believes that, with its GPT-enabled Bing, it can genuinely shake Google’s pre-eminence, one way to capitalize would be to muscle its way onto Apple devices.

Were that to happen, Google and Microsoft would find themselves in a bidding frenzy, with Apple as the beneficiary. Apple has no search engine of its own (as yetat any rate) and no generative AI chatbot waiting in the wings. But it can still stand by the side of the track and make plenty of money off the hectic AI sprints of its competitors.

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