According to analysts, Google’s new chatbot, “Bard,” which is powered by the large language model ChatGPT, could cost the company billions of dollars more in processing costs. Google is concerned about the cost of search because it must process billions of searches every day, and the back-and-forth nature of chatbots necessitates more processing than standard keyword searches. Morgan Stanley and SemiAnalysis estimate annual costs of $6 billion and $3 billion, respectively. While Google is cautious about the scale of Bard, it is unclear how the company will monetize the new search engine, and inserting ads into chatbot responses may not be successful.

As Alphabet chairman John Hennessy put it, cutting costs will be a “couple year problem at best.” Google has a history of addressing cost issues, such as when it purchased YouTube and built its own server chips for machine learning. However, given the company’s recent cost-cutting efforts, the prospect of skyrocketing costs for “a few years” is not ideal. For marketers, the question is whether chatbots will increase or decrease ad revenue and whether they will result in less time spent on Google than the traditional 10 blue links search engine.

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