AI: The Tortoise and the Hare

...both Google and OpenAI/Microsoft can win in our Tale

The Bigger Picture, December 3, 2023

The media is fixated on the story of how Google is the AI hare to OpenAI (and partner Microsoft’s) hare. How it’s but a zero sum race to the finish, and how Google is the slow-poke potential loser in this tale to the swift and daring OpenAI. The swift and bold hare who keeps racing ahead despite its unforced errors along the way. The Bigger Picture I’d like to focus on this Sunday, is how this tale may have a different happy ending for both than the one being told. Let me unpack.

First, to illustrate this set-piece narrative, here’s a piece by the Information Friday titled “Google Postpones Big AI Launch as OpenAI Zooms Ahead”:

“Google has quietly delayed the public debut of Gemini, a conversational artificial intelligence that aims to compete with OpenAI, to January, two people with knowledge of the decision said.”

“Google CEO Sundar Pichai recently decided to scrap a series of Gemini events, originally scheduled for next week in California, New York and Washington, after the company found the AI didn’t reliably handle some non-English queries, one of these people said. The planned events, which hadn’t been publicized, would have marked Google’s most important product launch of the year, after it strained its computing resources and merged large teams in an urgent pursuit of OpenAI.”

“The delay underscores how difficult it’s been for Google—which has 200,000 employees and was long considered an AI leader—to catch up to an 800-person startup that has developed one of the fastest-growing software businesses in history. OpenAI also has buoyed Microsoft, a Google Cloud rival that has gotten traction selling OpenAI technology to cloud customers.”

“The Information reported last month that Google told some cloud customers and business partners not to expect to receive access to the primary Gemini model until next year, but the scrapped events also imply that other products such as search (which now has generative AI results), Bard, Google Assistant and Google Docs may not get a boost from the new technology until 2024.”

Notice the tortoise and the hare set up, with distinct shades of David vs Goliath thrown in for extra flavor.

The whole story continues the narrative in that style in spades. And it’ll likely continue to be the favorite framing by the media as we go into 2024 soon.

The reality from my perspective is that Google is likely to do just fine in this ‘race’ in the what’s only the first stages of the AI Tech Wave.

That Google will likely be the ‘winner’ over the next couple of years in terms of what I’d call ‘AI augmented Search’ over OpenAI and Microsoft for three key reasons:

1. Google will be able to leverage its 90%+ share in global Search and win due to user convenience and incumbency.

2. That Google already has formidable Foundation LLM AI assets up and down the tech stack from the chips up to multiple, multimodal Foundation LLM AI models.

3. And finally, Google is the best positioned to deliver the most RELIABLE Ai augmente3d Search because its twenty five year history of fusing deterministic Search software, with probabilistic ‘machine learning/AI” software.

OpenAI and Microsoft, despite being the ‘Hare’ in this tale, have a huge amount of wood to chop in terms of getting billions to use their AI driven ChatGPT and Microsoft CoPilot products. Even with its spectacular success to go from zero to over a 100 million users a month, in just a year using ChatGPT, OpenAI and Microsoft are a far far distance away from the 9 billion searches Google already enables for over five billion mobile and desktop Search users EVERY DAY.

I’ve outlined these points in detail in this piece back in August, and none of the core points change. This despite OpenAI’s formidable progress in its technologies, its possibilities for various new businesses ahead. And of course what Microsoft itself is doing leveraging the unique partnership with OpenAI.

It’ll undoubtably be a most interesting and entertaining ‘race’ to watch in 2024 and beyond. But recognize that the AI markets enabled by the AI Tech Wave is more than big enough for both contestants in this race. and likely a whole host of players large and small to come. It’s but barely the beginning of a long race. So let’s not prematurely call the winners and losers. Enjoy the games being played by all. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)