OpenAI ChatGPT: Will It Kill Google? ChatGPT Review 2023

OpenAI ChatGPT

Over the last few days, Open AI’s new chat GPT has been making headlines. And it’s probably hard to overestimate how much artificial intelligence is going to change our lives and the economy.

So I asked Open AI’s chatbot whether the recent developments of OpenAI represent a threat to Alphabets.

So Google’s core business, Google Search, which as of September 13 represents and around 60% of Alphabet’s total revenue. And according to the chatbot, Open AI is not a threat to search engines.

OpenAI ChatGPT

But honestly, I don’t agree with the chatbot’s response. And I do think that chatbots have the potential to make Google Search obsolete.

So is Open AI chatbot really going to kill Google’s core business? What does Google have some advantages to that may help the business fend off some of the new competitors? OpenAI ChatGPT

All right, so search is an area that is dominated by Google Search, which runs around 99,000 search queries per second, which adds up to a whopping 8.5 billion searches per day, which again represents a market share of around 92%.

Over the last nine months of Google’s 2022 fiscal year, for example, the business generated $120,000,000,000 in revenue just from search.

But this business is possibly about to be disrupted by a new technology, namely AI and large language models that can read, summarize and translate texts and predict future words in a sentence, letting them generate sentences similar to how humans talk and write. chatgpt review

So let me just show you a couple of examples that highlight why chatbots like open AI Chat GPTs might actually represent a very real threat to the business behemoth Google. And yeah, it’s Google search division. ChatGPT Review

For instance, when you ask the chatbot to create a detailed one week travel plan to Paris for someone who loves French food and who wants to stay in a four star hotel, you get the following response I think the result is pretty damn impressive.

There’s no need to Google for restaurants, no need to Google for hotel suggestions, and the central pillars of your trip are basically planned. And this was done within 5 seconds.

I then asked it, can you recommend a particular cinema in Paris and tell me how I can get there from my hotel using public transportation systems? And again, the results make Google almost obsolete as I don’t have to filter through lots of different links that may be provided by Google.

OpenAI ChatGPT

I just get a very concise recommendation by the Open AI chatbot instead. And although the chatbot’s results are not always perfect, and sometimes false information is yet presented with a high degree of confidence by the bot itself, which also bears its risks, I think improvements over time are inevitable.

Now, personally, I find the chat GPT chatbot so useful that I already asked my iPhone to create an app for it that is now located on my phone’s home screen.

And I found myself using Chat GPT instead of Google multiple times a day already. For instance, I recently had a debate with a friend about the right amount of carbohydrates per day and whether carbohydrates are bad.

And instead of googling for some arguments, I just asked the Chat GPT to write a short scientific essay that outlines why carbohydrates aren’t as bad as they are, maybe sometimes presented as in the media, especially for young male athletes.

And I can think of many more use cases ranging from quick tutorials for example how do I fix a dripping showerhead? To more conceptual requests why should I buy the iPhone 14 instead of the iPhone 13? OpenAI ChatGPT

To productive requests like writing or fixing code or writing block entries on topics X, Y or Z. So are we witnessing the start of a rising competitive intensity in search for the first time in the last few decades?Basically.

Arguably, it is not only opt may I that has the potential to dethrone Google, Microsoft, the Tech Behemoth recently announced its ambitions to launch a so called super app that combines shopping, messaging, web search, newsfeed and other services in one single app, like WeChat in China.

Now, I do have a couple of thoughts on the threat that Open AI in particular may represent for Google that I want to share with you today.

So I think to understand why the Open AI chatbot is a threat to Google’s core business, first of all, you have to understand how Google makes money on Google search. OpenAI ChatGPT

Simply put, I would say Google makes money primarily through advertising and more specifically, performance based advertising, at least for the most part.

OpenAI ChatGPT

This means when people use Google to search for something online, the search engine might display ads that are related to the search term.

Businesses can actually target specific locations, languages and audiences, and they pay Google to display their ads mostly on a pay per click basis, meaning businesses only pay Google when someone actually clicks on their ad.

Now, the problem with a chatbot like Chat GPT is that there are no longer links.

The quality of the answers of yeah, the chatbot is on average of higher quality and more time efficient than yeah when you Google something and then have to basically fight your way through the various links that are provided by Google.

And I think this creates a problem because of course you could argue that Google could just copy what Chat GPT does and integrate it into their own services, just like Facebook for example, has copied features like Stories from Snapchat, or similarly, Microsoft has been copying solutions from competitors like yeah, for instance Slack or Zoom for decades. OpenAI ChatGPT

However, if there are no links, there is no monetization. Or maybe one can figure out some form of monetization for search results like the ones provided by a chatbot, but the monetization possibilities may be less attractive. Now, if we do assume that the results of a chatbot are harder to monetize.

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This puts Google in a difficult position and a dilemma. Sure, Google is already spending billions on AI, and its AI business division DeepMind has actually come up with numerous programs that outperform humans in games like Go Star Graph Was Bratago for example, and they even solved a 50 year old protein folding challenge.

Moreover, they are also into autonomous driving with way more. And their latest annual report, they actually outlined that they are exploring options to make use of AI in search too.

We are currently experimenting with multitask unified model capabilities to make searching more natural and intuitive and even enable entirely new ways to search.

So maybe based on their AI know how, copying the functions of chat GPT may not be that hard. Although to be honest, I really don’t know.

I would assume that OPEN AI probably has a major head start in this area. But then again, Google has access to so much data that yeah, this probably gives them a slight edge too. OpenAI ChatGPT

But even if they could copy it, I think monetizing the search results is harder than the traditional Google search business.

And then Google would basically cannibalize its own search business, which as of now, as we’ve shown in the beginning of the article, represents the majority of their profits.

And we do know that businesses are often reluctant to innovate if yeah, this will kill their traditional legacy business.

OpenAI ChatGPT

And I think this is actually expressed in the so called innovator’s dilemma, which is a concept developed by Harvard Business School professor Clayton Christensen.

And it refers to the situation where a successful company is facing a new market or technological challenges, but resists to change and continues to rely on its established strategies and products even as they become less effective. Because as I just said, this old strategy is generating the majority of profits.

So, long story short, Google has probably more to lose than to gain here. And even though Google’s valuation is already somewhat depressed, especially relative to the stock’s history,

if the AI disruption narrative gains traction, there’s probably some downside to the stock’s current valuation left. OpenAI ChatGPT

Now, the bull case, on the other hand, might be that search results from a chatbot may actually be monetized at an even better rate, because the chatbot could offer you just the best paid option when looking for a hotel in Paris, for instance.

OpenAI ChatGPT

And for the user, it may be very hard to tell that there is an ad in the first place. So in a way, it could blur the distinction between paid and non paid search results.

And this may actually be a net positive with Google in its current form. For example, personally, I almost never click on the first couple of results which are paid ads.

Yeah. And so as I just said, a chatbot might actually be an ad positive when that distinction between paid and yeah, not paid search results becomes more blurry.

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