The Big Tech is fighting over AI. Who will win the Rumble?
Big Tech is spending big bucks in GenAI. Find out what they are upto in today's The Status Code.
Did you know about the growth of investment in GenAI since 2020?
That’s more than FinTech (240%). Its rapid growth surpasses hair growth on an Indian actor’s chest (Don’t worry, I’m South Asian).
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Anyway, so GenAI startups raised a whopping $1.5B in 2022. In a recession. How? Because tech giants like Amazon, Meta, Google, and Apple know it’s the future.
And why? Two reasons.
GenAI holds the mantle.
A million users flocked to use ChatGPT in its first week. That’s more than the population of 74 countries in the world! (Yes, I painfully counted).
GenAI is transforming the workflow of people. And unlike Crypto or Blockchain, people get it.
You give a prompt, and voila, here’s your digital art.
People felt this powerful using “I’m Feeling Lucky” from Google last time.
With better GenAI tools, companies are reducing costs for testing new products (Apple 👀). And employees are getting more things done in less time (CoPilot).
But the Status Man, wait. ChatGPT sucks. It messed up my email the other day.
Someone smart once said: “You should worry about the current trajectory, not results.”
And boy, GenAI is moving like a rocket, alright!
Whatever the current version of ChatGPT is, it's just a start. The future looks different.
And Big Tech is spending big bucks to lead us to that:
TikTok gave Meta a poison pill.
Before TikTok, nobody could touch Meta because of its huge social graphs.
But TikTok changed the game. It instead used Machine Learning to suggest which video you should watch (from all videos it had).
And because TikTok's engagement model became so popular, Meta had two choices. Follow TikTok and take the poison, or watch and die.
Meta took the poison. And gave away its long-term competitive advantage.
And now, Meta needs to find another strategy. And AI plays a huge part in it.
Investment in hardware. TikTok wasn't the only nemesis for Meta in the past year. Apple released its privacy update for iOS in 2021. As a result, it made it difficult for Meta to target ads. Their ad model has yet to recover since. That's why Meta is betting big in its Reality Labs Division. They want control over both hardware and software. And if Metaverse is the future, the investments in Oculus will position it as a hardware leader in the new world. No wonder Zuck is OK with losing $10 billion dollars every year.
Spending on data centers. Next-gen AI hardware requires better infrastructure (better servers and networking equipment). Which is why Meta is planning to ramp up their capital expenditure to $39 billion in 2023.
Tools for the Metaverse. As it continues to build Metaverse, it will need significant AI breakthroughs. A speech-to-speech translation system for Hokkien, an oral language in China, is one of them. It is one of many Meta's efforts to bridge the language barrier in the metaverse.
Last week, CEO Satya Nadella announced he's letting go 10,000 people at the company.
To cut it short - Satya says they want a workforce in line with their focus on AI (reading between the lines here.) For the “next major wave of computing.”
Microsoft is betting big on OpenAI. The same week they fired so many people, they announced an extra $10 billion investment in OpenAI. They now own 49% of the AI startup.
Using OpenAI models in their own products. The next move is to use OpenAI models in a suite of their products.- GitHub helps you generate snippets of computer code through CoPilot (which uses GPT-3).- Enter a prompt in Bing, and it will generate images (using OpenAI's Dall-E).
Unlike Microsoft, your boy Apple is discreet.
But here's a surprise: Apple acquired more AI companies than anyone else between 2016 and 2020.
Apple’s strategy is different. They aren’t buying companies to disrupt industries. They are buying small, innovative companies to complement their products.
Investment in a GenAI music startup. One recent buy is that of a UK startup called AI Music. It helps generate tailor-made music from AI. And Apple has already released its new Digital Narration feature to produce audiobooks.
Big commitments of investment in the US. Apple announced a five-year plan in 2021 to invest $430 billion in innovative fields (5G and Silicon Engineering).
Amazon was the first mover in the market for virtual assistants. And it's Alexa continues to lead the market. Besides, on the cloud front, AWS is still kicking everyone else’s asses.
Its Alexa Fund. Amazon has a $200 million fund to invest in startups working in voice technology. They have already invested in 120 companies through the fund.
Open AI is not the only one. Amazon has its own language models - Amazon Comprehend and Amazon Translate. Experts say they show GPT-3 level abilities to understand insights from text and translate.
Google (or should I call them Alphabet? Nah.)
For years, Google was the undisputed AI king. Kinda like how New England Patriots won a Superbowl just about every year.
But even Tom Brady got old, and Google seems to be fumbling.
Code Red. CEO Sundar Pichai announced “Code Red". Code Red is like countries announcing a National Emergency to build more weapons. Google wants that, but for AI development.
I have a Chatbot too. Google is desperate to release a new chatbot feature in its search engine. They don't want OpenAI to be getting all the credit.
Investment in AI startups. It acquired AI avatar startup Alter for $100 million. The startup helped game and app developers to put avatars into their products. But the most prominent was that of DeepMind (for $600 million back in 2014. In many ways, Microsoft stole Google’s playbook. A big company with big pockets investing in a leading AI startup.
Sparrow - Google’s answer to ChatGPT? DeepMind is soon launching a ChatGPT competitor, Sparrow. Their CEO says it will also include an ability to search the internet using Google to give responses. It is something ChatGPT cannot do yet.
So, the battle is ramping up.
The stage is set.
It's a Royal Rumble between the Big Tech.
Who's going to win? God knows.
Maybe there'll be a different player joining the Rumble soon.
But one thing's for sure. This is going to be fun.
And the Status Man is watching with a bag of popcorn. But don't worry. With every update, as things unfold, I will send you a letter as a good friend should.
For today, tell me your prediction: Who are you putting your money into?
See ya codies.