Google CEO Pichai: Considering adopting a subscription model for new AI products
On October 26th, during the 2023 third quarter financial report conference call, Google and its parent company Alphabet CEO Sundar Pichai stated that the company may adopt a subscription model in certain new artificial intelligence (AI) products.At this meeting, Brian Nowak, an analyst at Morgan Stanley, an American investment bank, asked about Google's investment in artificial intelligence search and how Wall Street should view the future returns brought by these investments
On October 26th, during the 2023 third quarter financial report conference call, Google and its parent company Alphabet CEO Sundar Pichai stated that the company may adopt a subscription model in certain new artificial intelligence (AI) products.
At this meeting, Brian Nowak, an analyst at Morgan Stanley, an American investment bank, asked about Google's investment in artificial intelligence search and how Wall Street should view the future returns brought by these investments.
Novak asked, "Have you seen any examples of SGE or Bard being more efficient, with higher conversion rates, and higher engagement? Do they to some extent indicate signals that these investments may bring returns
Pichai replied, "I am very satisfied with the feedback from users on SGE, and we are promoting it to more users
The CEO stated that with artificial intelligence, Google will have the opportunity to develop the search and intelligent assistant Google Assistant service in the next decade.
SGE refers to the Google Search Generation Experience, which is a new search version that includes generative artificial intelligence functionality. Budd is a chat robot launched by Google, aiming to compete with ChatGPT, a chat robot from artificial intelligence research company OpenAI.
Over time, there will be updated paths, just like what we did on YouTube, "he added. I believe that in terms of artificial intelligence work, subscription mode is also a possible path
For a company whose revenue and profits mainly come from advertising, this is a big deal. Wall Street is nervous about any significant changes in Google search, as search advertising profits are very lucrative. Transforming the traditional search experience into a ChatGPT style user interface may disrupt the display and execution of these advertisements, so Google is acting cautiously.
In this context, it is surprising that Pichai is willing to consider subscription as a possible business model for some of his emerging artificial intelligence services. Perhaps the success of the YouTube subscription model has given this CEO more confidence. Google's video business provides YouTube TV, a cable television like service provided through the internet. The company has recently launched NFLSundayTicket, which allows viewers to watch rugby matches outside the local market.
YouTube charges hundreds of dollars per season, while YouTube TV charges over $70 per month. For a company that typically provides free advertising support for internet services, this is a significant amount of money. Google executives stated at the financial report meeting that they are satisfied with the initial response of NFLSundayTicket.
In the third quarter, Google's "other bets" revenue increased by 21% year-on-year, with YouTube's subscription revenue growth being particularly strong. (Small)
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