Microsoft can afford to make a less profitable product for search than Google because if Google competes it’s a net win for Microsoft.

AI has many other profitable uses for Microsoft but specifically using it to compete with Google Search seems like a poison pill.

The point, as I understand it, is for Microsoft the additional cost of making their search return results as a LLM is pretty small as compared to their overall business.

However, they will force Google's hand into moving their whole search load over to LLM to avoid loosing market share to Bing. This will cost Google a lot more as search is a much bigger part of their business.

It's an interesting theory but I wouldn't know enough to evaluate how likely it is.