Microsoft is reportedly already planning to bring ads to Bing's AI chatbot

It's early days, but Microsoft is figuring out how to monetize the tool.

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Microsoft is reportedly in talks with advertising agencies on how to slot ads into the juiced-up Bing, particularly when it comes to the generative AI-powered chatbot. The company is already testing ads there, according to Reuters, including by slotting in traditional search ads.

The ad agency talks are still said to be in the early stages. Only a small number of users have access to the chatbot, and millions more are on the waitlist. As such, Microsoft may not feel like there's a rush to incorporate ads right away.

Microsoft reportedly anticipates that the chatbot's more conversational approach to delivering information will bring in more users and, in turn, advertisers. Ads in the chatbot might also be featured more prominently than conventional search ads. One place where you might see ads is in the links that the chatbot uses for citations in its responses. Microsoft told Reuters that it will work with partners and advertisers as it starts exploring the potential of the tech for ads.

It's not an enormous surprise that ads are likely on the way to Bing's chatbot and, presumably, Google's Bard. While they've already had some hiccups, generative AI chatbots have the potential to reshape how people find information. Given how important search revenue currently is (more than half of Alphabet's $282.8 billion revenue for 2022 came from search), the companies have little choice but to monetize the chatbots. The most obvious path is figuring out how to stuff ads inside them.