Source: Wall Street News

Author: Bu Shuqing

In February of this year, Microsoft launched the ChatGPT version of the Bing search engine. At the time, Microsoft said that if the new version of Bing could take even a tiny bit of market share away from Google, it could boost its revenue by $2 billion.

Now that six months have passed, even 1 percentage point may be an unattainable goal.

On Thursday local time, the Wall Street Journal reported, citing data from analyst firms, that **Bing had a 3 percent share of the search market in January and remained at 3 percent in July. In July, Bing had just 1% of Google's monthly user count, about the same as in January. **

The performance of the new Bing once again proves the point of AI skeptics.

AI skepticism spreads! Expert: AI may never bring in revenue

Since ChatGPT disrupted the world of artificial intelligence, global technology giants such as Microsoft and Alphabet have accelerated the pace of investment in artificial intelligence and redesigned the entire business around artificial intelligence. They regard artificial intelligence as a new fire for revenue expansion and profit growth new engine.

Venture capital investors have also been pouring blood into the AI industry, and they've never deliberately exaggerated. The 50 most promising generative AI startups identified by intelligence site CB Insights have raised more than $19 billion in funding since 2019. Of these, 11 are now considered unicorns with valuations exceeding $1 billion.

Even McKinsey, which has always advocated calmness, estimates that in the 63 use cases it analyzed, artificial intelligence can increase the economic value of 2.6-4.4 trillion US dollars per year, which is equivalent to creating a United Kingdom every year (the GDP of the United Kingdom in 2021 is 31,000). One hundred million U.S. dollars).

But, what if they are wrong? What if generative AI turns out to be just a "dud"? **

The growing AI skepticism comes as tech expert Gary Marcus said in a piece published last week that we could see valuations as investors realize that generative AI doesn’t work well and lacks “killer” business applications. The possibility of a "massive, distressing adjustment".

**(artificial intelligence) hasn't generated revenue yet, and probably never will. **

Marcus, co-founder of the Center for the Advancement of Trustworthy AI, testified before Congress this year that he has long been skeptical of the intelligence of the neural network models on which chatbots such as ChatGPT are based.

Take the unreliability of the model itself as an example. One of the fatal flaws of artificial intelligence technology is that it can create hallucinations and speak nonsense seriously.

The bigger concern is that the content produced by generative AI is polluting the datasets on which future systems are trained, threatening what some are calling “model collapse.” Generative AI adds more imperfect information and deliberate false information to the knowledge base, further "enshittification" (garbage) the Internet, which means that ** trained AI will output more nonsense. **

Bing's performance is disappointing, and the success or failure of Office AI has attracted much attention

The Wall Street Journal attributes AI's failure to help Microsoft compete for search engine market share -- according to a third-party assessment -- to the fact that people have become accustomed to using the dominant Google. It also notes that the idea of using a chat interface for search is still new to many.

Chat interfaces are still an unusual way for people to find information online, said Daniel Tunkelang, a search consultant who has worked at Google and LinkedIn (now owned by Microsoft). The new version of Bing is "cute, but not game-changing," he said. **

Microsoft disputed the data, saying the third-party researchers did not count all visits to Bing chat pages, the report said. Yusuf Mehdi, Microsoft's chief marketing officer for consumer products, told the Wall Street Journal that Microsoft's own data shows that Bing is gaining market share.

"We've made more progress in the last six months than in the last year or two combined," Mehdi said. "We're delighted with where we started."

It's worth noting that search has never been Microsoft's main business. The new version of Bing hasn't changed the trend of its ad sales. Microsoft's advertising business, which accounts for less than 6 percent of total revenue, mostly from Bing, grew 3 percent in the most recent quarter compared with last year, flat from the previous quarter but slower than it was before the launch of Bing.

Embedding generative AI in more products and services before AI proves to be a powerful tool for increasing revenue and profits may create greater risks.

Microsoft has embedded generative AI in Office software, including Word, Outlook and Excel. Microsoft also plans to charge users of its new Microsoft 365 Copilot cloud productivity software $30 per month.

According to Bernstein analyst Mark Moerdler's research report, **365 Copilot's price is higher than his expectations, equivalent to a price increase of 53% to 240%. **Faced with such an expensive price, are users willing to pay for it?

Microsoft's fourth quarter of fiscal year 2023 (second quarter of 2023 natural year) productivity and business processes (including Office, LinkedIn and Dynamics) revenue was US$18.3 billion, a year-on-year increase of 10%; **CFO Hood said that "Copilot has not yet done a good job In preparation for a full launch, the product may not actually generate revenue until the second half of FY24." **

Adobe: fluorescent flash

It is undeniable that it is very important for an AI company to hold "killer" software.

On Thursday local time, Jim Cramer, a well-known financial speaker, said on a CNBC program that computer software giant Adobe currently has the best artificial intelligence products among software companies.

"I think they're the best," Kramer said on "Squawk on the Street."

Adobe launched an AI image generation tool in March this year - Firefly (firefly), its function is similar to other AIGC (generative artificial intelligence) tools, input text, generate pictures. The training sources are mainly some Adobe's own libraries and public domains, so they are safe for commercial use.

Since its launch, Firefly has been updated many times, and it will soon be connected to Google's AI chat robot Bard. Adobe also opened the paid TOB version of Firefly in early June.

Cramer said he believes Firefly's launch is a success, positioning Adobe well in the new wave of artificial intelligence.

"This firefly is amazing," Kramer said.

Cramer's comments came after Bank of America upgraded Adobe to buy from neutral and adjusted its price target to $630 a share, up from Wednesday's closing price of $514.49 a share. About 22.5%.