REDMOND, WASHINGTON — Microsoft (MSFT) fired its latest salvo against rival Google (GOOG, GOOGL) on Tuesday, debuting a new version of its Bing search engine running on a more powerful version of OpenAI's popular ChatGPT natural language AI technology.
Microsoft CEO Satya Nadella took the wraps off of the newest iteration of Bing and an updated version of its Edge web browser at an event held at Microsoft's headquarters, during which he explained how AI will transform the search engine.
"It's a new day in search. It's a new paradigm for search," Nadella said. "Rapid innovation is going to come. A race starts today in terms of what you can expect. We are going to move fast. For us, every day we want to bring out new things. And most importantly we want to have a lot of fun innovating in search."
Microsoft argues that search hasn't changed much in the 20 years since companies began using algorithmic search engines. To that end, Microsoft is adding generative AI to the equation, which it says makes it more powerful than any of its rivals.
The company is using what it calls its Prometheus Model. The idea is to hit a number of points, including improving the relevancy of answers, annotating search answers with specific web links and citations, getting users more up-to-date information, and improving the safety of answers.
In the new Bing, users will see standard web links on the left and AI-powered answers on the right that are pulled out specifically to address questions.
Microsoft provided an example of when users are looking for a loveseat at the store and want to know if it can fit in their car. Bing will pull up the dimensions of the loveseat and of your car to help determine if you're getting it home or not. The software will also say if it's not sure if it will fit exactly right.
In another example, in a search for the pros and cons of the top-three selling pet vacuums, Bing pulls from various articles on the web on the right side of the screen, something users currently need to navigate by visiting multiple sites.
And if you're looking for an egg substitute for a recipe, Bing can provide multiple examples of options and then say what it actually does to the recipe, such as making a cake more fluffy.
Bing will also use a new chat experience, as well. Say you're looking for a 65-inch TV. The answers on the right side of the screen provide a number of TVs and some highlights. You can then refine the query by clicking on the available Chat box and ask which of the listed TVs is best for gaming.
It will then pull that information from the web and offer up information on which TVs offer certain gaming capabilities. You can then break it down further to ask which are best for a lower budget.
Finally, Microsoft showed how Bing can be used to help put together an itinerary for a five-day trip to Mexico City. The search engine was not only able to provide a complete itinerary — it also broke it down asking it to change the trip to a three-day version.
As far as the Edge browser goes, Microsoft is adding a dedicated Bing button that brings the search engine's power to the browser.
'This technology is going to reshape pretty much every software category'
"I think this is the beginning of a very new era," OpenAI CEO Sam Altman said during the event. "[Microsoft and OpenAI] share a deep sense of responsibility in ensuring that AI is deployed safely."
Microsoft is giving a good amount of weight to its investment in AI. In the lead up to the presentation, Nadella equated the technology and its economic opportunity to Microsoft's founding.
"I think that this technology is going to reshape pretty much every software category," he said.
Last month, Microsoft announced it is making a multi-year, multi-billion investment in OpenAI with the goal of adding the company's capabilities to Microsoft's offerings. OpenAI ChatGPT exploded in popularity when it was released in Nov. 2022.
The platform allows users to request things like, "Write me a poem about a flying horse," as well as provide responses that sound as though they've been written by a human. The software is called generative AI, because it formulates unique responses based on the enormous amounts of data on which it's been trained.
On Monday, Google, likely anticipating Microsoft's announcement, debuted its own natural language generative AI capabilities. The software, called Bard, is meant to provide users with AI-powered responses to their queries that sound as though they were written by another human.
Google didn't stop there. The company also announced generative AI capabilities will be coming to its search platform in the coming weeks.
Companies are competing in a race to be the first in the generative AI space, which could give them a major leg up when it comes to courting bot average consumers and business customers. By making their software more approachable, companies like Microsoft and Google can provide customers with easier-to-understand answers to their queries, whether that's asking how far away the moon is from the Earth or where specific data is stored on their corporate servers.
The AI wars are only going to heat up from here.
Sign up for Yahoo Finance's Tech newsletter
More from Dan
Got a tip? Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube