Why Microsoft Stock Is Climbing Higher Today
What happened
Microsoft (NASDAQ: MSFT) held a much-anticipated artificial intelligence event yesterday in which it unveiled an updated version of its Bing search tool and its Edge web browser that add advanced elements of OpenAI's popular ChatGPT language model to the services.
The move takes direct aim at Alphabet's Google and its dominance in the online search industry, which sparked an interest in Microsoft's stock today
The tech giant's share price was up by as much as 3.4% this morning and had gained 1.1% as of 10:36 a.m. ET.
So what
The AI conversational chatbot, ChatGPT, has taken the internet by storm since it debuted just over two months ago. Now, Microsoft has added its advanced functionality to its Bing search tool. Microsoft says that using ChatGPT will give users more complete, conversational answers when they search online, compared to receiving a simple list of links, and the chatbot will act as a "copilot" for online users.
"AI will fundamentally change every software category, starting with the largest category of all -- search," Microsoft CEO Satya Nadella said in a press release. The new Edge browser will also bring users the ability to compose emails, write LinkedIn posts, and complete other writing functions, according to the company.
Both the new Bing AI functionality and updated Edge browser are available as a limited preview right now and will be available to millions of users "soon," Microsoft said.
Image source: Microsoft.
Now what
Microsoft's announcements yesterday are more than just a simple update to existing software. Microsoft is hoping that integrating OpenAI's advanced AI tools into Bing and Edge will be so useful to online users -- and better than the current way people access the web -- that it can start to eat into Google's search business.
Microsoft is betting big on AI. It was an early investor in OpenAI and recently announced an additional "multi-billion dollar, multi-year" investment in the company, rumored to be worth $10 billion.
While it's still unclear whether Microsoft's move toward AI integration into Bing and Edge will pay off, there's clearly a lot of demand from users for this tech. In the first two months after launching, ChatGPT reached 100 million monthly active users.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool has a disclosure policy.
