Companies afraid to pay this AI bill

Onur Demirkol
Feb 24, 2023
Updated • Feb 24, 2023

ChatGPT and AI are what everyone has been talking about for a while, as there is a possibility of technology shaping around them in the future. Despite the high cost, they seriously influence the upcoming tech, which will likely be an issue for major companies like Alphabet.

According to Reuters, Alphabet is trying to find a way to lower the cost while operating a ChatGPT-like AI to help Google searches. ChatGPT is known for having massive expenses due to its need for excessive computing power, and regular keyword searches on Google cost a lot less. However, technology is moving towards AI-related innovations and finding a way to lower costs while keeping up with the trends is what big companies are looking to achieve nowadays.

Alphabet's Chairman John Hennessy talked to Reuters and talked about how the AI, known as a large language model, likely costs 10 times more than a standard keyword search, but they are working on "fine-tuning" ways to help reduce the expenses. Even the revenue from potential chat-based search ads won't be able to cover most of the expenses it creates.

Reuters reported that "Morgan Stanley estimated that Google's 3.3 trillion search queries last year cost roughly a fifth of a cent each, a number that would increase depending on how much text AI must generate." This statistic represents Google's regular search and not the estimated amount in case of a possible route that Google could take to be more involved in AI. Analysts also projected that Google could face a $6 billion surplus in expenses by 2024 if an AI like ChatGPT were to handle half the queries it receives with 50-word answers.

Alphabet is trying to find a way to lower the cost while operating a ChatGPT-like AI to help Google searches.
Image is taken from Reuters

Alphabet is trying to include generative artificial intelligence in its newly revealed chatbot Bard, but the costs are expected to hurt the company. It is looking to implement a version that could be considered "lightweight." According to analysts, the AI model needs billions of dollars of chips and electricity costs while companies are pressured with carbon-footprint goals. Google's classic keyword search model is based on web crawlers that scan the internet for the best results quickly, but the new model will need a whole new system and adaptation. It will be very expensive for Google to run an AI engine for its searches.

However, some companies offer AI-based searches, and many users have started using them rather than the classic Google keyword search method. It looks like Google will eventually adapt to the new system in some way to keep its revenue and continue to stay at the top for many years. Alphabet's industry rivals like Microsoft are already in the new AI business as Microsoft is working on its Bing search engine, showing off multiple future plans recently. In the meantime, Google's AI chatbot Bard caused them real trouble after giving a wrong answer to a question and hurt Alphabet's market value.


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