Alphabet CEO Sundar Pichai said on July 25 that the latest advances in artificial intelligence are providing them with an opportunity to reimagine many of their products, including the most important – Search.
“This is our seventh year as an AI-first company, and we intuitively know how to incorporate AI into our products. Large language models make them even more helpful, models like PaLM 2 and soon Gemini, which we are building to be multimodal,” Pichai said during the company’s earnings conference call.
Pichai said they are in a period of “incredible innovation for Search” that has continuously evolved over the years.
On May 10, at its annual developer conference Google I/O, the tech giant unveiled an AI-infused version of its search engine, called Search Generative Experience (SGE), that uses generative AI capabilities to make search more natural and intuitive.
This announcement was made at a time when the company’s core search business encounters the biggest challenge in over a decade amid renewed competition and an ongoing shift in consumer behaviour.
The way people engage with information is changing and becoming more conversational, thanks to recent Generative AI advancements. This phenomenon is being driven by Microsoft-backed OpenAI’s ChatGPT. Its soaring popularity had raised alarm bells inside the search giant, prompting them to rush products integrated with generative AI capabilities.
Google previewed a new integrated search results page in May, that will start appearing with an AI-powered snapshot on top of search results. This snapshot will display a quick topic summary and links to go deeper into the topic. The experience is currently available to select users.
During the earnings call, Pichai said that they have reduced the time it takes to generate AI snapshots by half, since the May launch with a goal to deliver faster responses over time. “We are engaging with the broader ecosystem and will continue to prioritize approaches that send valuable traffic and support a healthy open web” he said.
Generative AI “gives us a chance to now not always be constrained in the way Search was working before, allowed us to think outside the box”, Pichai said “Over time, this will just be how Search works”
Pichai said that the feedback they have received so far has been largely positive. “We are keeping a very high bar, but I would say we are ahead on all the metrics in terms of how we look at it internally and so couldn’t be more pleased with it,” he said.
Advertising is coming to Google’s Generative AI Search
Ads will continue to play an important role in this new search experience, the Alphabet chief said. The company is currently testing ad placements and formats, apart from giving advertisers tools to take advantage of generative AI.
Nearly 80 percent of advertisers already use at least one AI-powered search ads product, Alphabet chief business officer Philipp Schindler said.
During the quarter, Alphabet reallocated a number of teams and are actively moving people to “higher priority activities”.
“We are combining various engineering efforts across core infrastructure and cloud. Products like Bard and SGE are being built by small fast-moving teams that have been reallocated to these high-priority efforts” Pichai said.
Overall, Alphabet posted a 7 percent increase in its quarterly sales to $74.6 billion in Q2, indicating that the digital advertising market is slowly improving. Net income climbed 15 percent to $18.4 billion for the quarter.
The company also announced that Ruth Porat, its long-standing chief financial officer, will assume the newly created role of President and Chief Investment Officer of Alphabet and Google, effective September 1, 2023.
She will continue to serve as CFO, including leading the company’s 2024 and long-range capital planning processes, while the company searches for and selects her successor, the search giant said.