Microsoft sees AI reshaping search as Google calms investors

ALPHABET'S GOOGLE AND Microsoft, whose quarterly earnings each got a boost from their established search and cloud-computing businesses, used their time with investors to emphasise what's next: artificial intelligence.

- JULIA LOVE, DINA BASS & DAVEY ALBA

In their respective earnings calls on Tuesday, the tech giants, which are becomingrivals in the competition forthe future of search, offered upstarkly different assessments of just how much disruption is in store for the market. Google executives encouraged investors to trust in the company's long track record as the world's leading search engine, and framed Al as just another shift in its constantly evolving business.Microsoft suggested that something much more dramaticis underway.

Investors seemed to to like Microsoft's thesis better, sending its shares up as much as 7.7% in premarket trading before New York exchanges opened, while Alphabet increased less than 2%.

Until recently, Google was viewed as all but invincible in the market for online search, which it dominates worldwide. That changed with the debut of OpenAI's wildly popular chatbot, Chat GPT. Microsoft has begun weaving OpenAI's technology into its Bing search engine, and the partnership has ratcheted up pressure on Google to reinvent its core search business to allow for more of the conversational exchanges that generative AI makes possible.