Microsoft CEO Satya Nadella said Tuesday that AI-powered search is the biggest thing to happen to his company in the nine years he’s been at the helm.

“I haven’t seen anything like this since, I would say, 2007-2008, when the cloud was just emerging,” Nadella told CNBC’s John Fort.

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Microsoft invited reporters to its headquarters in Redmond, Washington, for an event that focused on new AI-powered updates to the company’s Bing search engine and Edge browser. Bing, which is a distant second Google in search, will now allow users to chat in a way that provides more detailed responses to queries.

The Bing and Edge updates will launch Tuesday on the desktop in a limited preview, meaning users will get a limited number of search queries during the initial period.

Nadella said that search is a very profitable business, so these developments present a great opportunity for Microsoft.

“I’ve never felt so liberated in terms of the possibilities in the coming days,” he told CNBC.

Microsoft’s event on Tuesday follows the company’s announcement in January of a multibillion-dollar investment in ChatGPT maker OpenAI. The deal marks the third phase of the partnership between the two companies, following Microsoft’s previous investments in 2019 and 2021.

ChatGPT automatically generates text based on written prompts in a much more advanced and creative way than past chatbots. The web-based tool has gone viral since its debut in November. Tech executives and venture capitalists even gushed about it on Twitter comparing that is, before Apple’s iPhone debuted in 2007.

On Monday, Google announced an AI chatbot technology called Bard that will start rolling out in the coming weeks. Bard will compete directly with ChatGPT.

OpenAI CEO Sam Altman attended Microsoft’s event on Tuesday and confirmed that Microsoft has incorporated some OpenAI GPT-3.5 language technologies into Bing to improve its capabilities.

OpenAI CEO Sam Altman at a Microsoft event

Jordan Naveth | CNBC

“I feel like I’ve been waiting 20 years for this, so I’m really excited that it’s here,” Altman said during the presentation.

Nadella was promoted to CEO in 2014 after running the company’s cloud business. He led Microsoft’s expensive and risky transition from on-premise servers to cloud infrastructure. This turned out to be a huge boon for a company that had largely missed the transition to mobile computing.

Microsoft Azure, the centerpiece of the company’s cloud division, ranks second Amazon Web Services and ahead of Google in the cloud infrastructure market.

“You can only be relevant in technology if you are good enough to see the waves of change and then refocus your technology and innovation agenda and your business model agenda,” Nadella said. “We’ve been through some very tough ones. The last one we went through was obviously mobile and the cloud. We caught one, we missed one.”

— CNBC’s Jordan Naveth contributed to this report

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