Microsoft Corp MSFT doubled down on its investment in OpenAI's ChatGPT last month, and among the many use cases, the tech giant has set its sights on arguably the most near-term AI opportunity.
"The most profitable large software business is Search," Microsoft chairman and CEO Satya Nadella said Tuesday on CNBC's "Power Lunch."
What To Know: Microsoft previously invested in ChatGPT in 2019 and 2021. The most recent "multibillion-dollar investment" aims to help accelerate AI breakthroughs, one of the most obvious in the Search realm.
Alphabet Inc's GOOGGOOGL Google Search is a dominant leader in the space, but Microsoft's Bing is the runner-up, albeit by a wide margin. Nadella is confident the company can utilize AI to close the gap as it aims to build an "AI supercomputer for the world."
"I've never ever felt this liberated in terms of opportunity in the days ahead," Nadella told CNBC.
Bing is already profitable and the company doesn't have much to lose. Google makes more money on Windows than all of Microsoft, he said, adding that alone is driving the company to "really go after this" opportunity.
Related Link: Microsoft Vs. Google: Analyst Says Brace Yourself Cuz 'First Shot Across The Bow' In AI Battle Coming Today
Bing has been instrumental in Microsoft's success despite its small cut in the market. People forget Microsoft is behind much of the work that has led to this massive wave of popularity in ChatGPT, Nadella said.
"Remember, the heavy lifting was done by the Azure team to build the compute infrastructure because these workloads are so different than anything that's come before," the Microsoft CEO said.
He told CNBC that the only way Microsoft can maintain its position as a leading technology company is to be competitive in each layer of technology.
"When you think about scale, you have to think about multiple dimensions, not just scale for scale's sake," Nadella said.
Google has also ramped up its focus on AI in recent months. Near the end of 2022, several reports revealed Google had declared "code red" to deal with the threat AI poses to Google Search.
After releasing its fourth-quarter results last week, Google CEO Sundar Pichai noted the company is excited about "the AI-driven leaps" it's about to "unveil in Search and beyond."
See Also: ChatGPT Effect? Google Intensifies AI Focus With Latest Investment
MSFT Price Action: Microsoft has a 52-week high of $315.95 and a 52-week low of $213.43.
The stock was up 4.20% at $267.56 at market close Tuesday, according to Benzinga Pro.
Photo: Bhupinder Nayyar from Flickr.
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