Artificial Intelligence is the buzzword of 2023.

Mentions absolutely rocketed when ChatGPT opened the world’s eyes to just how real the application of AI could be, and have only powered higher over the last few months – more than +400% higher on a YoY basis.

Similar to the “Metaverse” in 2021, AI is an ambitious concept -- a pie in the sky technology -- many companies are scrambling to hitch their wagon to.

But if history is a good teacher, we know that the successful application of a booming consumer theme is harder than it looks.

Just ask Zuckerberg.

META’s metaverse losses exceeded $3.6 billion in October of last year, with plans for spending to increase.

And we’re watching all kinds of companies scramble to adopt and apply AI to their own business models.

Snapchat (SNAP) even created an AI-driven chatbot…but it's a little unhinged.

Check out this thread that should be having parents concerned. The race to integrate AI could be considered reckless.

But some companies entering the AI race are recording meaningful improvements to core products.

Microsoft Leverages AI to Boost Bing Adoption

In February, Microsoft announced the integration of OpenAI's ChatGPT-4 language into Microsoft Bing and Edge.

OpenAI launched GPT-4 as the successor to GPT-3, the technology behind ChatGPT. This development is the next step in deep learning and produces human-level intelligence. GPT-4 is literally able to pass the bar exam and place in the top 10% of test takers.

But more importantly, this AI integration is driving consumers to actually use Bing, Microsoft’s search engine.

You can see the impact of this integration in the chart below.

Not only did demand surge, but happiness has surged more than +12 points higher from 2022 lows post-release.

While this certainly won’t kill Google, it could definitely shake things up…especially as the fight for advertising dollars heats up.

And Microsoft has AI application plans beyond its Bing search engine.

Earlier this week, MSFT announced that it is bringing AI to Microsoft Suite 365 in the applications Word, PowerPoint, and Excel. The AI feature is named Copilot and is operating on a type of AI software called LLM (large language model).

This integration is more sophisticated than a chatbot. The Word copilot feature will literally draft content for users. However, MSFT noted that it might not be 100% accurate.

The Copilot tool can also generate PowerPoint slides, help create emails, business proposals all while personalizing it to the user by using past stored data (emails, meetings, chats, notes).

Right now the feature is still in test drive mode, but you can see where Microsoft’s head is at.

Bottom line: artificial intelligence can greatly improve user experience and productivity in the very real present and future…if applied strategically (and safely).

And it looks like MSFT is off to a great start.