Earlier this week, Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) CEO Sundar Pichai dismissed criticism of his company's AI strategy, while targeting Microsoft Corporation (NASDAQ:MSFT).
What Happened: During his appearance at The New York Times' DealBook Summit Pichai responded to Microsoft CEO Satya Nadella’s criticism, suggesting a direct comparison between their companies’ AI models.
In response, Pichai noted that Microsoft relies on ChatGPT-parent OpenAI technology for its models.
"I would love to do a side-by-side comparison of Microsoft's own models and our models any day, any time," but "They're using someone else's models."
Pichai also dismissed concerns that competitors might challenge Google’s dominance in search. He said that Google’s search engine is set for significant changes in the coming year.
"I think you'll be surprised even early in '25 the kind of newer things search can do compared to where it is today," Pichai stated.
In addition to competitive pressures, Google is currently dealing with legal battles that could force it to divest parts of its business, such as its Chrome browser.
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Why It Matters: The rivalry between Google and Microsoft in the AI space has been intensifying. Earlier this year, an internal email from Microsoft showed that the company invested in OpenAI due to concerns about lagging behind Google’s AI capabilities.
In September 2024, Google filed a complaint with the European Commission, accusing Microsoft of anti-competitive practices in its cloud services.
The following month, Microsoft accused Google of orchestrating covert lobbying campaigns to undermine its cloud computing business.
Last month, Microsoft CEO defended Bing’s growth against Google’s search dominance, highlighting the incremental benefits of its partnership with OpenAI.
"We are thrilled to be an investor. We’re thrilled to be a partner around I.P. They’re one of our biggest customers now," he stated at the time.
Price Action: As of this writing, Alphabet’s Class A stock edged down by 0.093% in pre-market trading, reaching $172.48, while Class C stock declined by 0.052% to $174.22. During Thursday’s regular trading session, Class A shares fell 0.99%, closing at $172.64, and Class C shares dropped 1.01%, finishing at $174.31, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photos courtesy: World Economic Forum on Flickr
