Microsoft’s Bing plans AI ads in early pitch to advertisers

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NEW YORK: Microsoft (MSFT.O) has started discussing with ad agencies how it plans to make money from its revamped Bing search engine powered by generative artificial intelligence as the tech company seeks to battle Google’s dominance.
In a meeting with a major ad agency this week, Microsoft showed off a demo of the new Bing and said it plans to allow paid links within responses to search results, said an ad executive, who spoke about the private meeting on the condition of anonymity.
Generative AI, which can produce original answers in a human voice in response to open-ended questions or requests, has recently captivated the world. Last week, Microsoft and Alphabet’s (GOOGL.O) Google announced new generative AI chatbots a day apart from the other. Those bots, which have not yet rolled out widely to users, will be able to synthesize material on the web for complex search queries.
Early search results and conversations with Microsoft’s Bing and Google’s chatbot called Bard have shown they can be unpredictable.
Alphabet lost $100 billion in market value on the day when it released a promotional video for Bard that showed the chatbot sharing inaccurate information.
Microsoft expects the more human responses from the Bing AI chatbot will generate more users for its search function and therefore more advertisers.
Advertisements within the Bing chatbot may also enjoy more prominence on the page compared to traditional search ads.
Microsoft is already testing ads in its early version of the Bing chatbot, which is available to a limited number of users, according to the ad executive and ads seen by Reuters this week.