Google Loses 100 Billions In 1 day (A.I. War Is Heating Up)
The race for AI dominance is heating up. On February 7th, Microsoft fires the first shot across the bow at Google. They unveil their grand plan for AI. Then the next day, Google shoots back and unveils their AI, but it was an embarrassment.
To say that both presentations were unequal would be an understatement. So let’s start with Microsoft. CEO Satya Nadella takes to the stage. He talks about how every Walk of Life is beginning to be changed by AI. Then he goes on to talk about the three stages of the web:
- Its birth on PCs and servers,
- Then mobile and apps,
- Then the next phase will be AI.
Satya and the rest of Microsoft have begun to see an issue with search. The fact is search hasn’t changed in 20 years. And some people think that Google has gotten even less accurate lately because of SEO keyword stuffing.
Bing (New Era):
Microsoft’s new edge browser and Bing will be able to do three new things:
- Answer your questions,
- Chat with you,
- And create new things.
To highlight some interesting insights into the current shortfalls of search, they mentioned the statistic that 40% of people search for something and immediately click back out of the result that they got. This means that they can’t find what they’re looking for. And they calculated that about half of all searches don’t get the answers that you want. Most of these are very specific queries based on your personal situation.
Microsoft showed a chart highlighting the issue. The new Bing will bridge the gap between search and generative AI, giving you the power of traditional search with the helpfulness of the good people on Reddit.
So getting onto the new Bing itself, it’s running on AI that is quote “much more powerful than chat GPT and tuned specifically for search”. In the presentation, Microsoft stated that because they already have a search engine, they can now use back-end web indexing and data to efficiently and directly tie into the new version of chat GPT.
Onto the new Bing interface: when you type a complex query, you’ll get the typical results on the left and on the right you’ll get a synthesised answer with sourcing. You can ask about current events or future events and get the same experience.
A particularly cool example was asking if a specific seat from Ikea would fit in a 2019 Honda Odyssey. What you’ll see is Bing can actually find the dimensions of the seat, the Interior Space of the car, and then make an estimation as to whether it will fit.
But this was just the beginning. The main feature was the new chat section. Think of this as a search with your own personal helper to help you refine your query until you get exactly what you’re looking for. This comes in handy for activities like trip planning and shopping research.
So Microsoft has also added AI into their edge browser. You can, for example, pull up a PDF, ask questions about it, summarise it, and compare it to other stuff on the web. It’s pretty mind-blowing.
Say, I’m browsing around in my new edge browser and I want to read a Gap’s quarterly report. And up comes the 15 page Gap PDF. It’s pretty long. I won’t have time to read all that. What I’d love is a summary of the key points. With one click I can open up the sidebar. I can use chat and Edge to simply ask it to give me the key takeaways of the page I’m on. So I’ll just say “key takeaways from the page”. And being an AI, it can now read that PDF and look how great it comes up with the summary of the key points here. A massive time saver.
But now I want to compare this with say Lululemon who also has their third quarter earnings. Bing can now call out to the web, pull information from outside of this page, compare it with the information that’s on this page, all with an edge. Think about how much time that would have taken otherwise.
There’s also a new compose tab where you can generate whatever content you’d like, specifying the tone, length, and other parameters.
Google:
The very first advertisement for Google’s Bard showcased it giving a wrong answer after Fortune reported on the incident. Alphabet’s share price began to slide. In the ad, Bard is given the prompt “quote what new discoveries from the James Webb Space Telescope (JWST) can I tell my nine-year-old about?” Bard responds with a number of answers, including one suggesting the JWST was used to take the very first pictures of a planet outside the Earth’s solar system or exoplanets. This is inaccurate. The error was spotted hours before Google hosted a launch event for Bard in Paris, where a Google senior executive touted Bard as the future of the company. Shares of Google parent alphabet were down more than seven percent in early trading Wednesday, outpacing declines in the broader S&P 500.
The event was very disappointing. Very little time was spent on The Bard conversational AI. A lot more time was spent on reiterating how good existing Google products were like search, translate, Google lens and Maps. The elephant in the room was what Microsoft and open AI were doing. So, after 13 minutes talking about other things, they finally got onto their chat GPT competitor powered by their research language model Lambda. The thing was it was presented as a standalone product. What they showed was very similar to chat GPT. There was no sourcing or further integration into any Os or any other kinds of features. Google is basically where open AI was last year.
And then of course the infamous moment of the presentation. Presenter Liz Reed was about to demonstrate multi-search, a new Google Lens feature, but it was the most embarrassing incident in a tech presentation since Steve Jobs Wi-Fi wouldn’t connect back in 2010.
Aside from this, there wasn’t much else. Overall, the Google presenters seem flat and also the live stream’s comments were turned off, very unusual for a Google event. So, the event didn’t provide any groundbreaking information or much information at all for that matter. It only signaled that Google probably isn’t prepared and doesn’t have a solid plan yet or they would have showed it.
As a consequence, 100 billion dollars of stock value was lost due to their poor performance. Of course, markets are volatile and it’s probably going to bounce back, but it is an indication of what investors immediately thought. Google No Doubt will probably regroup and figure something out. There just isn’t really another choice for the company. Satya seems genuinely very calm, cool and collected about the whole thing.
Business Model
Here is a short interview with Microsoft's CEO discussing how he sees the future:
- How are you thinking about monetising this?
"The last time I checked, search was the most profitable category there is on planet Earth, so therefore all I need is a few more users and someone else that I’m competing with has to keep all of their users and all of their gross margin. That’s I love. I’m looking forward to that."
- There’s a lot of fear that AI is going to take our jobs and replace us, is that unfounded and how do you think about tools like Bing now and how we use it in the job market?
"At the foundational level it is going to help us do our jobs better, reduce some of the drudgery in some of of our jobs whether it’s in coding or in writing or in automating workflow or searching for information so at the fundamental level I think we need a productivity boost. I feel it’ll create more jobs. The barriers to knowledge work will come down. So I mean the unintended consequences around labor market shifts are always something we need to be mindful of but I don’t subscribe to this zero sum or one lump of Labor fallacy and I think that we’re going to have new jobs get created and more job opportunities."
- What about this guy? Does Clippy haunt your dreams?
Not really. It’s probably the thing that was the most fun character Microsoft introduced, which we have been on a 30-year journey to perfect it. So I’m excited to be here in 2023 launching Bing with AI.
So one of the key things in the story is that Microsoft has little to lose but Google has everything to lose. Satya told the financial times that search has changed forever and Google has to defend their entire market share.
So what about the wider discussion? What about the jobs that will be replaced? Website content makers may fret AI may have taken a lot from their businesses. It will also be interesting to see how Publishers and content owners react to this. The chat answers are more advanced and the simple query answers that we see in search engines today and it’s clear that people will click on links less even if Bing is clearly sourcing information here. Will there be lawsuits from new sites over using their content? What about political bias and censorship? What about all the unintended consequences? Time will only tell.
Conclusion:
So in conclusion, even just a year or two ago nobody would have thought that Google would be in this position. From their presentation, it looked like they were unprepared and they weren’t integrating Bard as well as chat GPT was being used. What do you guys think? Anyway, so that’s an update to the beginning of the AI War.
The draft for this article was created using Python. The goal of it, aside from distributing interesting content, was to assess the potential of video-to-text libraries. The original content belongs to ColdFusion youtube channel.
