Google is planning to implement significant changes to its revenue model by charging for AI-enhanced search features. This move comes as a response to the substantial costs associated with providing the service. As a result, other key players in the industry are likely to follow suit and offer subscription models to cover their expenses.
According to reports by the Financial Times, Google’s new search feature will be exclusively available to users of its premium subscription services. This means that customers who already use artificial intelligence assistants in other Google tools, such as Gmail and its office suite, will also gain access to this enhanced search experience. Currently being tested in beta for selected users, Google’s generative AI technology is designed to respond to queries with a single answer, resembling the conversational approach of ChatGPT and its competitors.
Heather Dawe, Chief Data Scientist at the digital transformation consultancy UST, explains that AI search is more expensive to compute than Google’s traditional search processes. Therefore, by charging for AI search, Google aims to recoup these costs.
The cost of training AI models is often the focus when discussing the expenses associated with AI. However, analyst Brent Thill from investment firm Jefferies states that training AI accounts for only one-tenth of the overall expenses in the sector. The majority of AI compute spend is directed towards inferencing, which is the process of querying an AI model. Inferencing spend has been growing rapidly as more models and tools are put into production.
In response to these mounting costs, competitors in the AI search space have implemented similar subscription plans. Perplexity, an AI-powered search engine, offers a $20 monthly “pro” tier that grants access to more powerful AI models and unlimited use.
Meanwhile, some companies continue to offer their AI products for free, operating at a loss. Microsoft’s Bing provides free access to its AI features but ties them to the company’s Edge browser. On the other hand, the browsing and search startup Arc currently offers its products without charge and plans to generate revenue in the future by charging companies for business features.
FAQs
1. What is AI-enhanced search?
AI-enhanced search refers to the integration of artificial intelligence technologies into the search process, allowing for more accurate and personalized results.
2. Why is Google charging for AI-enhanced search?
Google is charging for AI-enhanced search to cover the significant costs associated with providing this service, including computing power and resources required for training and inferencing models.
3. Will other search engines also start charging for AI-enhanced search?
It is likely that other search engines will follow Google’s lead and introduce subscription models to cover the expenses of offering AI-enhanced search features.
4. How does Google’s AI search feature work?
Google’s AI search feature utilizes generative AI technology, which responds to queries directly with a single answer, resembling a conversational approach.
Sources:
Financial Times: [Link]
Perplexity: [Link]
Microsoft Bing: [Link]
Arc: [Link]
Google’s decision to charge for AI-enhanced search features is a significant move that is likely to have an impact on the industry as a whole. As reported by the Financial Times, the implementation of subscription models by key players in the industry is expected as they try to cover the costs associated with providing this service.
The new search feature by Google will be exclusively available to users of its premium subscription services. This means that customers who already use artificial intelligence assistants in other Google tools, such as Gmail and its office suite, will also gain access to this enhanced search experience. The feature is currently being tested in beta for selected users and utilizes generative AI technology to provide responses with a conversational approach similar to competitors like ChatGPT.
Google’s decision to charge for AI search is driven by the fact that it is more expensive to compute than traditional search processes. Heather Dawe, Chief Data Scientist at UST, a digital transformation consultancy, explains that the process of training AI models, which is often considered the main expense, accounts for only one-tenth of the overall expenses in the sector. The majority of AI compute spend goes towards inferencing, which is the process of querying an AI model. As more models and tools are put into production, inferencing spend has been growing rapidly.
Competitors in the AI search space have already implemented subscription plans to address these mounting costs. Perplexity, an AI-powered search engine, offers a $20 monthly “pro” tier that provides access to more powerful AI models and unlimited use.
Not all companies are following the subscription model approach, however. Microsoft’s Bing offers free access to its AI features but ties them to the company’s Edge browser. On the other hand, the browsing and search startup Arc currently offers its products for free and plans to generate revenue in the future by charging companies for business features.
In conclusion, the move by Google to charge for AI-enhanced search features is a response to the significant costs associated with providing this service. Other competitors in the industry are likely to follow suit and introduce subscription models to cover their expenses. The use of AI in search is an expensive process, with a major portion of the expenses being directed towards inferencing rather than training AI models. As the industry evolves, it is expected that companies will continue to explore different revenue models to sustain their AI offerings.