Those of you who’ve been reading for a while may have noticed a break in my regular posts – it’s August, and that means vacation. I’ll be back at it after Labor Day, but an interesting story from The Information today is worth a brief note.
Titled How Google is Planning to Beat OpenAI, the piece details the progress of Google’s Gemini project, formed four months ago when the company merged its UK-based DeepMind unit with its Google Brain research group. Both groups were working on sophisticated AI projects, including LLMs, but with unique cultures, leadership, and code bases, they had little else in common. Alphabet CEO Sundar Pichai combined their efforts in an effort to speed his company’s time to market in the face of stiff competition from OpenAI and Microsoft.
Microsoft today announced a cluster of upgrades to its Bing-ChatGPT product, including:
Eliminating the Bing chat waitlist, which effectively throttled the product’s growth by adding steps to a consumer’s journey.
Integrating more visual search results, which will enliven the consumer experience and potentially engage visitors for longer.
Adding chat history and persistence, a major differentiation between Bing chat and OpenAI’s ChatGPT, and for me anyway, the main reason I didn’t use Bing.
Adding more long document summarization, which is another feature that ChatGPT excels at.
Adding a platform layer to Bing, so third party developers can integrate in much the same manner as they can with ChatGPT’s plugins, which I’ve both praised and trashed in past posts (praised because of their potential, trashed because the model reminds me of the app store, which is a walled garden nightmare).
Overall, this news strikes me as Microsoft upping the ante not only on Google, which now has even more catching up to do, but also on Microsoft’s own partner OpenAI, which until now had a superior product. I’m on the road and not able to write as much as I’d like on this, but it’s worth noting. I’m sure the product managers in Mountain View aren’t getting much sleep these days – the pressure is mounting for Google to respond. And in OpenAI headquarters, the frustration has to be building as well – they cut that deal with Microsoft, and now have to live with its terms.
Once again, Google and Microsoft are battling for the AI spotlight – this time with news around their offerings for developers and the enterprise*. These are decidedly less sexy markets – you won’t find breathless reports about the death of Google search this time around – but they’re far more consequential, given their potential reach across the entire technology ecosystem.
Highlighting that consequence is Casey Newton’s recent scoop detailing layoffs impacting Microsoft’s “entire ethics and society team within the artificial intelligence organization.” This team was responsible for thinking independently about how Microsoft’s use of AI might create unintended negative consequences in the world. While the company continues to tout its investment in responsible AI** (as does every firm looking to make a profit in the field), Casey’s reporting raises serious questions, particularly given the Valley’s history of ignoring inconvenient truths.
I’ve written a long-ish post attempting to answer that question over at P&G’s Signal360 publication, please head there (and sign up for their newsletter!) if you’d like to read the whole thing. Below is a teaser for those of you who aren’t sure you want to click the link (so few of us do these days!).
Last week, while working on a post about what the ads might look like inside chat-based search, I got a surprising note from the communications team at Google. I had emailed them asking for comment on ads inside Bard, which Google had announced earlier in the month. To be honest, I was expecting the polite “no comment” I ultimately did receive, but I also got this clarification:
[We] wouldn’t have anything additional to share from the Search POV, as Bard is a standalone AI interface and doesn’t sit within Search.
Last week I asked if Google was f*cked, and since then quite a few of you have reached out asking what I think the company could do to … un-f*ck itself. “Easy enough to declare the company is too big, too stuck in the mud, too cautious, too dependent on its cash cow,” you told me. “Much harder to advise them on what to do about it.” One of you just sighed to me on the phone, then said “it’s always been this way. No large company can escape the innovator’s dilemma.”
Well, maybe so, but wouldn’t it be fun to try? I’ve been in touch with various Googlers over the past few weeks, as I’m still working on a “What should the ads look like” piece around ChatGPT and AI-driven search (promise, it’ll be done soon). While folks at Google are polite and engaged, they’ve also given me the extended play version of “No comment” – stating it’s too early to declare the business model for conversational search. In short, they’re waiting for the market to reveal itself a bit more before making any public statements or declaring themselves all in on tech’s next big trend.
Do generative AI innovations like OpenAI’s ChatGPT and Google’s LaMDA represent a new and foundational technology platform like Microsoft Windows, Apple iOS or the Internet? Or are they just fun and/or useful new products that millions will eventually use, like Google Docs or Instagram? I think the answer can and should be “both” – but to get there, the Valley is going to have to forego the walled garden destination model it’s employed these past 15 or so years.
The question of OpenAI’s ultimate business model has dominated nearly every conversation I’ve had this week, whether it’s with reporters from the Economist and the Journal, senior executives at large-scale public companies, or CEOs of ad-tech and data startups. Everyone wants to know: What’s the impact of generative AI on the technology industry? Will OpenAI be the next Google or Apple? Who wins, and who will lose?
What’s the hardest thing you could do as a tech-driven startup? I’ve been asked that question a few times over the years, and my immediate answer is always the same: Trying to beat Google in search. A few have tried – DuckDuckGo has built itself a sizable niche business, and there’s always Bing, thought it’s stuck at less than ten percent of Google’s market (and Microsoft isn’t exactly a startup.) But it’s damn hard to find venture money for a company whose mission is to disrupt the multi-hundred billion dollar search market – and for good reason. Google is just too damn well positioned, and if Microsoft can’t unseat them, how the hell could a small team of upstarts?
Just last week I predicted that Google would leverage ChatGPT to create a conversational interface to its search business, and that Microsoft would do the same in the enterprise data market. I briefly considered that I might have gotten it exactly backwards – Google has a robust enterprise data business in its cloud business (known as GCP), and of course Microsoft has Bing. But I quickly dismissed that notion – figuring that each behemoth would play the GPT card toward their strengths.
While I may have been right about ChatGPT getting a business model this year, it looks like I could be wrong on the details. Here’s The Information with a scoop:
I’ve used the image above for many years, mainly because I love how surprised the guy looks as he gazes into the crystal ball. Or maybe he’s just sat on something unpleasant. In any case, it pretty much sums up my approach to this, my 20th edition of annual predictions. I sit down, I might have an adult beverage on hand, and I just write until I feel like I’m done.
While reviewing my ’22 predictions (I did pretty well!) I promised to do something new: One post per predictions, ten posts total. But as I began that promised work, I realized it would test the limits of even my most dedicated readers (I see you, kids). So instead I wrote three long form posts, each with three or four predictions apiece. The first focused on AI, the second on advertising, and the third on markets, with a bonus call related to the ’24 election. Having now written all of them, I’m going to summarize them briefly in this “master post.” Grab your own favorite beverage, have a wonderful New Year, and read on!