It’s far more 5D chess than that.
Search costs nothing to run relative to ad revenue. Microsoft makes each query require 100x the cpu usage because users expect an LLM answer for results.
Microsoft’s share of search goes from 1% to 5%. Their cost go up but their sale of ads increases and they get valuable IP.
Google loses 5% share of market but its costs go up 100x.
Google can no longer finance its other bets like Cloud so effectively.
Microsoft meanwhile has a more compelling cloud offering.
Google starts to lose more ground on Cloud.
Amazon (not an AI company) lose ground to both.
Classic Art of War, if your opponent is strong, attack somewhere they are weak.
Search costs nothing to run relative to ad revenue. Microsoft makes each query require 100x the cpu usage because users expect an LLM answer for results.
Microsoft’s share of search goes from 1% to 5%. Their cost go up but their sale of ads increases and they get valuable IP.
Google loses 5% share of market but its costs go up 100x.
Google can no longer finance its other bets like Cloud so effectively.
Microsoft meanwhile has a more compelling cloud offering.
Google starts to lose more ground on Cloud.
Amazon (not an AI company) lose ground to both.
Classic Art of War, if your opponent is strong, attack somewhere they are weak.