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Google and Microsoft, in the crosshairs of Wall Street for the advances of ChatGTP

2023-04-25T23:18:54.319Z


In the midst of a new war for intelligent search engines, both companies reported profits in the first quarter of the year. What do analysts look at?


In the midst of the artificial intelligence war, Google and Microsoft jointly presented the balance sheets for the first quarter of the year.

The two tech companies, now battling to lead in the era of intelligent search engines,

reported higher-than-expected profits with a substantial contribution from their cloud businesses.

"What is important is the explanations that the companies will offer

about the projections they have for the next quarter

," explained Diego Martínez Burzaco, an analyst at Inviu.

Google and Microsoft are currently immersed in a global recessive context.

The owner of the most famous search engine,

reported a net profit of US$ 15,000 million, which represents a year-on-year drop of 8.4%

.

It is not a novelty.

The company trails several quarters with single-digit revenue after 20 years of growing expansion

.

The main factor, according to experts, is due to the drop in advertising revenue, something that generated

a wave of layoffs in the industry.

In January, Google announced numerous spending cuts, including

laying off 12,000 employees worldwide

.

This is, 6% of its total workforce.

For its part, Microsoft, between January and March obtained a turnover of US$ 52,857 million (an interannual growth of 7%),

which represented a 9% increase in its profits

, which exceeded US$ 18,300 million.

The biggest contribution to the company that Bill Gates co-founded came from Azure, the heart of its cloud businesses,

whose revenue increased 27% over the same period in 2022.

Financial analysts focus on the great novelty of the year:

the launch of ChatGTP

, which caused a sensation all over the world and which threatens to change the logic of search engines.

The artificial intelligence-based conversational chat was created by OpenAI, a company whose main shareholder is Microsoft, and which also contributed its cloud structure, Azure, to develop it.

It's already cashing in, as ChatGTP has been integrated into Bing

, the company's search engine.

Search is a business that allows Google to bill some US$ 162,000 million annually with advertising, where it leads widely.

But something is changing fast.

The Korean technology giant Samsung, the largest cell phone manufacturer in the world, is analyzing the possibility of closing an agreement with Microsoft

to implement Bing as the default search engine on its computers instead of Google,

according to what was published this weekend by the New York Times.

The news, according to the American newspaper, caused "panic" among executives of the Silicon Valley native company, which receives some US$3 billion a year for its arrangement with Samsung.

The report, which cites internal messages, relates some details of the negotiations to implement Bing, which today

looks renewed and much more competitive after the integration of the famous ChatGTP.

Google is also developing a new search engine based on artificial intelligence against the clock.

This program, according to what has emerged, is called

"Magi"

and will offer more personalized experiences to users who use it. Some analysts believe that Google, which represents more than 80% of Internet searches, rested on its laurels.

Source: clarin

All business articles on 2023-04-25

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