Microsoft, Google rebuild their worlds around AI

Major product announcements this week from Microsoft and Google demonstrate the unwavering determination of both tech giants to integrate generative AI at the core of their computing ecosystems.


Why it matters: These industry leaders perceive AI as a new competitive race and an opportunity to revitalize their central franchises that drive their businesses, such as Microsoft Windows and Google Search.


Driving the news: Throughout the year, Microsoft has been incorporating AI assistants into various apps and products. However, during a fall event on Thursday, the company unveiled a new strategy to unify these assistants into a single entity called Microsoft Copilot. This unified system will leverage knowledge from different apps and data sources and will have applications in both professional and consumer contexts.


In an upcoming update to Windows 11, Microsoft will introduce its Windows Copilot, incorporate Dall-E 3 into Bing, and integrate AI features into applications like Paint, Photos, and the screenshot tool. Furthermore, Windows will utilize AI to streamline various tasks, including computer backup and migration to new devices.


Meanwhile, Google has been on a similar trajectory to infuse AI across its product portfolio. This week, the company announced enhancements to its Bard chatbot, aimed at delivering more reliable answers. This is crucial for Google, as its entire business model revolves around providing trustworthy information. To achieve this, the technology's tendency to "hallucinate" or fabricate responses must be managed effectively. The Bard updates also enable users to integrate their Gmail archives and Google Docs files with the chatbot.


On Thursday, Google also showcased several new features that leverage AI to simplify video editing and publishing for YouTube creators. Among these features is Aloud, which allows moviemakers to dub their content into another language with a single click in YouTube Studio.


These announcements follow a team reorganization reported by Axios in July. The restructuring aimed to reshape the Google Assistant tool to align with the era of generative AI.


The big picture: Traditionally, choosing a computing platform entailed selecting between desktop operating systems (Mac or PC) or mobile platforms (iOS or Android). However, AI is transforming this decision-making process by introducing a fresh set of criteria for users to evaluate when choosing their digital tools. By enabling users to perform tasks effortlessly using plain-English queries and commands, AI empowers Microsoft and Google to fundamentally redefine the capabilities of their core products.


State of play: The current timing of the generative revolution is highly advantageous for Microsoft, particularly for Windows. Over the years, Microsoft has gradually amassed a range of technological assets beyond its desktop offerings. This includes its partnership with OpenAI and its prowess in cloud computing with Azure. Equally important, Microsoft has distanced itself enough from the epic antitrust battles of the past, enabling the integration of significant new capabilities into Windows without triggering regulatory concerns.


Be smart: The process of integrating Microsoft's diverse Copilots into a unified meta-assistant will require time and effort. During the recent announcements, Microsoft outlined its long-term vision while presenting the initial steps it is taking with Windows 11. The fragmented nature of the technology thus far, with separate AI features dispersed across various products, is a consequence of its rapid evolution, as noted by Aaron Woodman, Microsoft's vice president of Windows marketing. Woodman asserts that convergence is the next logical step.


Between the lines: Woodman observes a renewed sense of ambition within Microsoft, reminiscent of the drive experienced during his college years. This contrasts with the majority of his 26-year tenure at the software giant, where the company seemed to wait for technology to mature before making strategic moves in areas such as search and mobile phones.


Notably absent from this competition, for now, is Apple. Given the dominant market position of the iPhone, it is only a matter of time before OpenAI, Microsoft, Google, and others bring their AI tools to Apple's platform. However, Apple has exercised caution in incorporating the latest generative AI technology into its own systems and services. While features like dictation and autocomplete have benefited from underlying transformer technology in iOS 17, the company reportedly conducts internal tests on its own GPT-like engine, according to Bloomberg.


During an earnings conference call last month, Apple CEO Cook emphasized the significance of AI and the company's deliberate approach to integrating it into their products. Cook acknowledged substantial investments in research but also stressed the need for thoughtfulness, citing numerous issues that require careful consideration.


Editor's note: This story has been updated to clarify that Windows Copilot will be introduced through a forthcoming update to Windows 11. not a whole new edition of the operating system.