First AI War between Google and Microsoft

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First AI War between Google and Microsoft

In the face of this massive wave of promotion, Google is undoubtedly feeling uneasy. Why? Because ChatGPT has the potential to disrupt their biggest source of revenue: search engines. With ChatGPT's ability to answer questions and provide information in a conversational format, users no longer need to manually search for answers. This poses a significant threat to Google's search engine monopoly, which currently holds 93% of the global market share. The search business brings in 60% of Google's total revenue, making it a vital source of income.

Although Google has been a leader in artificial intelligence, having developed the Transformer model and internal machine learning bots like BET and LaMDA, their perspective on chatbots is vastly different from Microsoft's. As the king of search engines, why would Google cut down their money tree by releasing a chatbot that could potentially harm their reputation if not adequately trained? Moreover, training such a large-scale AI system requires a significant amount of computational power and financial investment, with ChatGPT running up a daily bill of $1 million.

Google's internal response to ChatGPT's emergence was the release of Code Red, an all-hands-on-deck initiative aimed at focusing the company's efforts on AI development. However, as time is of the essence, Google released its own conversational service called Bard, based on their internal bot, LaMDA. Unlike ChatGPT, Bard delivers more conversational responses and even jokes or expresses emotions, demonstrating Google's strength in chatbot technology.

While ChatGPT's success remains undisputed, Google's response shows that they are not going down without a fight. They understand the importance of keeping pace with technological advancements and investing heavily in AI research and development. In this race, speed is critical, as evidenced by Google's swift release of Bard one day after Microsoft's announcement.

After Google's announcement, it was clear from the stock market that they had taken a hit. It wasn't hard to see why, simply watching both Google and Microsoft's presentations would reveal the difference in quality. While everyone was eager to see the AI chatbot capabilities, Google spent the first 40 minutes discussing previous achievements, photo search, and a missing phone, leading viewers to skip this portion entirely. When they finally introduced Bard, their conversational service, it received only a few minutes of attention. To make matters worse, Google released a promotional video for Bard that contained factual errors in the bot's responses.

Although ChatGPT was gaining popularity, nobody could discount Google's strength in the AI field. Even though they kept quiet on the subject, people outside the company knew not to underestimate them. Their Code Red initiative was proof of how seriously they took the situation. However, by rushing out a subpar product, Google showed signs of panic and lack of preparedness, resulting in a loss of $100 billion in market value.

In contrast, Microsoft appeared more composed, with their CEO and OpenAI's CEO personally presenting their conversational AI capabilities in a nearly hour-long event, complete with numerous demos. This decisive preparation gave them the upper hand in the AI war's opening salvo.

But this AI war is not just between Microsoft and Google. Companies like META, Baidu, Tencent, and Alibaba are also getting involved, and stocks associated with generative AI, such as NVIDIA and AMD, have seen significant gains. Conversational, artistic, and programming AIs have exploded in the past few years, with funding exceeding ten billion dollars annually. In 2023, Microsoft invested $10 billion at the beginning of the year, pushing all available capital into this race.

Google may have lost the first battle, but it is unclear what will happen next. The AI race is far from over, and with so much investment and competition, one can only wait to see what the future holds.

This item was added to our catalog on Sunday 30 April, 2023.

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