Is ChatGPT a threat to Google's search business model?

Hey, thank you and welcome to my newsletter about AI and digital marketing.

I recently wrote a short article exploring the impact of OpenAIs 'ChatGPT' on Google's search business. Here it is in full below.

Feel free to leave a comment or message me if you have any thoughts.

Since discovering OpenAI’s?ChatGPT?chatbot a few weeks ago, it has quickly become a regular part of my daily routine for knowledge-based searches, as well as the daily routines of everyone I’ve shared it with.

From asking it for an 8th graders summary of?Einstein’s General Theory of Relativity?to helping me?co-write blog posts?to writing?snippets of Python or Javascript code, the breadth of knowledge and capabilities that ChatGPT has at its disposal is phenomenal. It’s like having my own personal tutor(s) and co-workers on call 247.

At the same time, I also couldn’t help but feel uneasy as a shareholder of?Alphabet, the parent company of Google search.

After using ChatGPT for a matter of minutes, it quickly became apparent that ChatGPT is to Google search what Google search was to the Yellow Pages in the 1990s. It’s a new paradigm, a truly disruptive technology.

Furthermore, ChatGPT appears to have left all other AIs we’ve become (mostly frustratingly) accustomed to interacting with: Siri, Alexa, Cortana, and others from the established big tech companies,?in the dust.

It’s apparent that ChatGPT is to Google search what Google search was to the Yellow Pages in the 1990s

Despite some limitations, such as the potential to generate false information and the fact that its dataset only includes information up until 2021, ChatGPT is significantly more advanced than any other AI system that most people have encountered to date.

Let’s face it, what do you use Siri for?

For me, nothing,?nada, not a single damn thing.

I have Siri on my computer and phone, but I rarely, if ever, ask it anything because, 99% of the time, I know it’s going to be a waste of time.

Similarly, the?killer apps?for Alexa have been kitchen timers, playing music and asking, “can dogs eat x?” where x is whatever my dog is begging from my plate at dinner time.

While ChatGPT and Siri/Alexa have some differences, such as Siri and Alexa’s ability to control external devices, all primarily function to provide answers to user questions, a sort of ‘artificial general intelligence’?(AGI) as it’s known in the trade, with a strong emphasis on the quotes.

… the?killer apps?for Alexa have been kitchen timers, playing music and asking, “can dogs eat x?” where x is whatever my dog is begging from my plate at dinner time

Siri and Alexa generally do this by providing access to information on the internet and reading it out to the user verbatim much of the time; while ChatGPT does something?entirely?different, in all cases, it attempts to generate its own original answers from what it already knows.

The difference this makes in usability is insane!

It’s like the difference between driving your own car versus putting the car on autopilot and asking it to drive you to a specific place and be there at a specific time whilst you kick back in the passenger seat and watch the latest Netflix series.

What does this mean for Google, where the majority of its revenues are generated from ads on its search platform?

Well, one thing is clear, Google?has?to respond to this new challenge.

ChatGPT has the potential to overturn the search market and attract nearly all knowledge-based queries away from the Google search platform.

For example, since I introduced my eldest daughter, who is studying at university, to ChatGPT, her use of Google for searches on all sorts of topics has declined dramatically.

ChatGPT has the potential to remove nearly all knowledge-based queries from the Google search platform in the near future.

It’s arguable that?knowledge-based?searches on Google are like a loss leader as the company generates less from those types of queries than they would versus a query with some sort of economic intent, like “buy walking boots”.

However, that means that the days of traditional search engines are numbered as the?one-stop shop?for accessing literally anything on the Internet.

It’s possible that Google will be happy if people start using AI chatbots for general “how-to” or “what is” queries because it would mean that the Googlebot would have to use fewer CPU cycles to generate ad revenue. This is because people would only use search engines for more specific queries related to economic intent queries like location-based retail or online shopping.

But let’s not forget AI is just beginning to be introduced to the public, and there is potential for future versions of ChatGPT or other AI companies to expand their chat and search capabilities to include more recent data to cater for economic intent searches. This could potentially challenge Google and other search engines, which currently earn a significant portion of their profits from such searches.

If you’ve ever watched the film?Limitless, starring Bradley Cooper, ChatGPT is a bit like the drug NZT-48 for increasing productivity.

Google has, until recently, been one of the preeminent leaders in AI. Now, literally, overnight, its main economic generator, the ads engine attached to search, is starting to look like MySpace versus Facebook back in the day or Facebook versus TikTok now.

If you’ve ever used a Google app, you’ll appreciate how truly terrible Google as a company is at GUI development. Although the single search box of Google search is the exception, the search engine results page (SERPS) has barely changed in 20 or more years.

It’s highly likely that Google has access to the same type of AI technology used in OpenAI’s ChatGPT and, of course, has access to the necessary raw data. However, it’s purely speculative to suggest that they may have held back on introducing this technology until they could devise a new economic model to supplement or replace their current ad-based search engine business model.

The counter-argument is that OpenAI, flush with a billion dollars or so of venture capital, will be unlikely to scale up and run ChatGPT for?free, forever?for the world?as it does now, without developing its own business model of?paid-for?usage.

If you’ve ever watched the film?Limitless, starring Bradley Cooper, ChatGPT is a bit like the drug?NZT-48?for increasing productivity (I kid you not!).

Already, I can imagine the response to OpenAI removing free access to their ChatGPT system; there will be students, researchers, coders, marketers and writers alike all weeping into their eighth empty coffee cup of the day as they stare at a blank screen!

Whatever the future holds, we might be in a golden age now whereby artificial general knowledge (AGK) as I like to call ChatGPT type capabilities?and?search are available to all for?free?at the stroke of a keyboard.

This can’t last forever, mind you, and nor can Google carry on without responding resolutely with its own version of AI-based chat before it irretrievably loses market share and becomes about as useful as the once paper-based Yellow Pages.