• Google CEO Sundar Pichai told investors Thursday that it is planning to roll out its LaMDA language model with search components "very soon," suggesting pressure from Microsoft-backed ChatGPT.
• The company also said it’s restructuring its artificial intelligence subsidiary DeepMind into Google, taking it out of Other Bets.
• The AI talk came as the company reported its fourth consecutive quarter in which earnings and revenue fell shy of analysts' estimates.

Alphabet and Google CEO Sundar Pichai said Thursday that the company will soon add advanced AI features to its search engine.

On Tuesday, CNBC reported that Google is testing some of these features with employees as part of a "code red" plan to respond to ChatGPT, the popular chatbot backed in part by Microsoft. They include a chatbot called “Apprentice Bard,” as well as new search desktop designs that could be used in a question-and-answer format. 

“Very soon, people will be able to interact directly with our newest, most powerful language model as a companion to Search, in experimental and innovative ways," he said, referring to Google's conversation technology LaMDA, or Language Model for Dialogue Applications.

Pichai said that it will release the large language model "in the coming weeks and months" so the company can get more feedback.

Executives frequently returned to the subject of artificial intelligence on the company's fourth-quarter earnings call. “AI is the most profound technology we are working on today,” Pichai said in his opening remarks.

The effort to direct attention to AI comes as the company faces pressure on its core advertising business and a competitive threat from one of its historic archrivals.

Thursday's earnings report marked the fourth consecutive quarter in which the company missed Wall Street's expectations for both earnings and revenue, according to expectation estimates provided by Refinitiv. Weakness in the advertising business appeared in an 8% revenue decline in YouTube's advertising revenue and a 2% fall in Google's Search and Other revenue.

Google is also facing pressure from ChatGPT, which was launched late last year by Microsoft-backed OpenAI. Google's prime business is web search, and the company has long touted itself as a pioneer in AI. But generative AI products like ChatGPT could pose a threat to the entire model of internet search, as they can provide creative answers to more complicated queries.

Microsoft is reportedly considering adding ChatGPT functionality into its own search engine, Bing. The threat of falling behind in AI has even reportedly spurred Google co-founders Larry Page and Sergey Brin to take a direct interest in the efforts years after they stepped down from day-to-day work at the company in 2019.

In addition to touting forthcoming search improvements, the company also said that starting in the first quarter, it will change the financial reporting structure for its DeepMind artificial intelligence segment so it rolls up to Google, instead of the Other Bets segment that includes long-payoff projects like self-driving cars and venture capital investments.

Google acquired the London-based company in 2014 for more than $500 million and then placed it under the Other Bets umbrella when the company reorganized as Alphabet in 2015. DeepMind turned a profit for the first time in 2021.

This reporting change “reflects the strategic focus in DeepMind to support each one of our segments,” Alphabet's finance chief Ruth Porat said on Thursday's earnings call.

"To be very clear, we consolidate Other Bets into Google only when that bet supports products and services within Google or Alphabet broadly," Porat added, pointing to cybersecurity company Chronicle, which it rolled into Google's cloud unit in 2019. "That was very effective."

Pichai also said the company will also provide "new tools" and APIs for developers, creators and partners to "empower them to discover new possibilities with AI. He added, "these models are particularly amazing for composing, constructing and summarizing."

But Pichai also warned that it will need to scale slowly, saying he views large language usage as still being in “early days.”

CNBC previously reported that employees had asked about the threat from ChatGPT in an internal meeting, and Google’s Jeff Dean told employees that Google has much more “reputational risk” in providing wrong information, and thus was moving “more conservatively than a small startup.”