ChatGPT a risk for Google?
Chatgpt is popular and gaining attention in recent months. It processes the Artificial Intelligence model and analyzes a large amount of data and responses to natural language users, as if it were a human being. Of course, this technology tends to be turbulent for countless industries – including Google, the largest oak in the contemporary world.
But according to Morgan Stanley, the tool’s success isn’t a fundamental threat to the search engine – but it may lead to lower margins for Alphabet, the owner of Google, in the long run.
“Growing interest in artificial intelligence and subsequent online compounds may force Google to accelerate development of its natural language model (LAMDA),” the bank books.
“We see this can lead to much greater silencing and smaller operating margins. The risk of turning Google into profitability.” According to Morgan Stanley, the cost of Chatgpt search is about $0.02 to 7 times the cost of Google today for each member searches.
“Although these costs may tend to decrease over time (with an increase in model efficiency), these costs are very high,” the report says.
Morgan Stanley estimates Google’s search cost to be around $0.003. “But it can be smaller, because we use the total CAPEX with the Google technical infrastructure to calculate the cost, and this CAPEX includes the data center equipment needed to support the YouTube and Google Cloud Platform. “
The bank notes that the cost of searching in Google has increased in recent years when it invests and is more part of artificial intelligence tools than the search engine. “But it’s still a small part of the cost of Chatgpt.” Banking analysts have tried to estimate the impact that Google is looking for in the push to artificial intelligence and artificial intelligence searches on the company’s banks.
The result is relevant: every 10% of Google inspections that are expelled at this coordination, the company will increase the company between 600 million dollars and 11.5 billion dollars (depending on the words for each search) – and the alphabet 1 and 5 percent points will be lost in operating the margin in the middle of this range.
Another danger, from Moor Stanley’s perspective, is that the alphabet cannot control search with artificial and natural intelligence models such as Google’s paid searches.
“It speaks to the Google Challenge to continue building the market and its leadership while protecting and providing free cash flow for its investors in the macro and smaller environment of the advertising industry.”