OpenAI’s ChatGPT has taken the tech world by storm, and an analyst delved deep into the artificial intelligence, or AI, product and the Impact it can have on search giant Alphabet Inc. GOOGL GOOG.
How ChatGPT Stacks Up Against Google: Google Search’s forte is answering queries that fall under the categories of internet navigation, maps, shopping and general queries, and it is more weighted toward shopping and general queries, Loup Funds’ Gene Munster said in a note.
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ChatGPT overlaps Google Search on some prompts, but the former’s responses differ from the latter in that it mimics human dialogue and fails to cite sources, Munster said.
Its strength is in its personalized assistance with email responses, content creation, brainstorming and summarizing long documents into bite-sized analysts, he added. The other use cases include grammar, categorizing items or extracting specific information from documents.
Does ChatGPT Pose Risk To Google? GPT-3’s training data will differentiate one "large language model," or LLM, from another, Munster said. Unique sources of data like tweets or customer reviews would fetch unique responses from the AI model, he said. The venture capitalist is of the view LLMs could be built into the backend of many tech services one uses.
This, according to Munster, would hurt Google in the long term. “Fewer eyeballs mean less ad revenue but I would characterize this as an unlikely outcome,” he added.
How Google Will Respond To ChatGPT: In its communication to investors, Google began to project itself as an “AI-first company” beginning in 2017, moving away from its vision of “organizing the world’s information,” Munster said.
He noted that AI is more clearly present in making Google Search results more relevant, the Waymo self-driving project and TensorFlow, the company’s open-sourced software library.
Google also has the money to fund investments to develop a ChatGPT competitor even if it does not go ahead with the rumored launch of DeepMind’s chatbot called Sparrow, Munster said. He estimates more than $60 billion in annual operating income from Google Search.
ChatGPT has a pushback in the form of acting only on historical information but lacking training in real-time information, Munster said. This is as opposed to Google Search’s capability of presenting present information.
Google has an upper hand over ChatGPT due to its massive user base, with four of its products — Search, Chrome, Gmail and YouTube — having over one billion monthly users, Munster said. He also noted that Google Drive and Google Photos have more than 500 million monthly users each.
“Maintaining users is a powerful competitive advantage for Google and it means that GPT-3 needs to be 10X better than whatever Google will announce,” he added.
“In the end, I believe that Google will be fine given the company has the vision, money and users to respond and compete with the rise of ChatGPT.”
Price Action: Alphabet closed Thursday’s session up 2.12%, at $93.05, according to Benzinga Pro data.
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