Monopoly conservation hurts Google AI development

When ChatGPT burst onto the tech scene in November 2022, a burning question on the minds of many technologists was how Google – which, until then, was known for its artificial intelligence prowess – could be caught flat-footed when the starter’s gun was ringing in the race to bring generative AI to the masses?

Paul Buchheit, creator of Gmail, suggested some answers to these questions in a recent edition of the Y Combinator Startup Podcast.

Bucheit, who left Google in 2006, maintained that after the company’s founders, Larry Page and Sergey Brin, began to reduce their roles in Google operations, the development of artificial intelligence began to be dictated by other considerations. “I think it’s become more about protecting and preserving the search monopoly,” he said on the podcast.

This has significantly slowed their AI progress, added Rob Enderle, president and chief analyst Enderle GroupAn advisory services firm in Bend, Ore “Until then, they were in a leadership position, then lost it with the refocus,” he told TechNewsWorld.

Surprised tech companies

Google isn’t the only tech company surprised by ChatGPT’s popularity, but it had more to lose from its development, noted Ross Rubin, principal analyst. Reticle ResearchA consumer technology consulting firm in New York City. “A lot of other big tech companies were surprised by ChatGPT, in terms of its popularity and how it would resonate with a wider demographic,” he told TechNewsWorld.

“But with such a high percentage of Google’s business driven by search and advertising revenue, it’s more important for them than Apple or Amazon to be able to use generative AI in a way that either protects or expands its search business,” he says.

“With Amazon, Alexa was never a revenue driver,” he continued. “It is the face or voice of the company in many contexts. But clearly, Amazon drives a lot of revenue from AWS and retail.”

“Similarly, Azure and Windows licensing are much, much bigger revenue streams for Microsoft than search,” he added.

Bucheit points out that Google has good reason to be concerned about AI His quest is caving into the gold mine. AI is an inherently disruptive technology because if you actually give people the right answer, they don’t have to click through an entire page full of ads, he explained.

Google was aware of that tension between profitability and providing the right answer as far back as 1998, he continued. “There’s always a temptation that if you make your results worse, people will click on more ads,” he said. “AI has the potential to disrupt this.“

The danger of good search results

“There’s no question that Google remains one of the leaders in AI, but it’s true that their focus on revenue and profit can hurt their ability to innovate, as they push their AI teams to produce and monetize technology,” observed Greg Sterling. observed Greg Sterling, its co-founder to the mediaA news, commentary, and analysis website.

He maintained that Google’s focus on growing revenue has already hurt the search user experience. “And it’s possible that removing them or reducing AI overview and search is associated with a negative impact on ad clicks,” he told TechNewsWorld.

In July, Search Engine Land, citing an analysis by enterprise SEO platform BrightEdge, reported that AI overviews in Google searches fell from 11% to 7% in June.

“By prioritizing search, Google can slow down its AI progress compared to competitors who have aggressively pushed AI boundaries, such as OpenAI and Microsoft,” said Mark N. Vena, President and Chief Analyst SmartTech Research In Las Vegas.

“This strategic pivot is likely to catch up or even surpass Google in AI research and applications, especially generative models and other cutting-edge AI technologies, which over time weakens Google’s leadership in the AI ​​field,” he told TechNewsWorld.

Is the impact of AI advertising exaggerated?

Although there is a risk that if the search results are too good, ad clicks may be reduced, that risk may be exaggerated. “I don’t think generative AI steals much from the ad business,” said Michael Hodel, director of equity research for the media and telecom sector. Morningstar Research Services in chicago

“The types of queries that generate ad revenue are those where there is no single answer and where advertisers hope to influence which route the user takes — like, ‘I might like some new shoes?'” he told TechNewsWorld. “The question is how will ads appear in a generative AI context?”

The answer to that question, he continued, lies in a comment by Alphabet CEO Sundar Pichai on the company’s second quarter conference call. “(W)e see ads appearing above or below AI overviews providing valuable options for people to take action and connect with businesses,” Pichai said.

In addition to being concerned about the impact of generative AI on ad revenue, Bucheit maintained that Google was worried about how the technology would play with regulators. AI was likely to anger regulators because it would only be a matter of time before it said something offensive. “I think they were terrified of it,” he said.

“So they were just extremely risk-averse,” he explained.

Slow start but strong player

If Page and Brin were still running the company, that risk aversion might be overridden, he continued. “But it takes someone with that level of credibility to make a bet with the company or to say, ‘Yes, we’re going to do this thing, and it’s going to cause a lot of problems,'” he said.

“But I think if given the chance, Google would never have introduced AI,” he claimed. “The only reason they introduced it was because OpenAI released ChatGPT, and all of a sudden, it became a thing they had to do.”

“And it helped them because OpenAI took a lot of bullets in terms of saying crazy and offensive things,” he added.

Despite the slow start, Vena insists that Google is making significant progress in the AI ​​arms race. “Using its vast data resources and deep expertise in machine learning, Google has developed powerful AI technologies like Bird/Gemini and large language models like PaLM,” he said.

“While competitors like OpenAI and Microsoft gained initial attention,” he continued, “Google has recently accelerated its AI initiatives, integrating AI more deeply into its products, including search, cloud services and consumer applications. This renewed focus, along with its strategic acquisitions and research, positions Google as a strong player in the rapidly evolving AI landscape.”