State Of The AI Wars, Google's Counterpunch, Elon's 4/20

Nico Grant of The New York Times joins Ranjan Roy and Alex Kantrowitz for our weekly news recap show. We cover: 1) The state of the AI war between Google, Microsoft, and OpenAI 2) Google's AI reorganization and what it means 3) Sundar Pichai's PR offensive 4) Google's forthcoming product counterpunch 5) How finances factor in to the companies' decision 6) Where we are on the innovation curve 7) The forthcoming multimodal models 8) Who wins 9) Elon's rough 4/20 10) The end of BuzzFeed News and the end of fun online 11) Some optimism about the future --- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

  This episode is brought to you by Genesis. What does it actually take to put Agentic AI to work across an entire enterprise? I recently spoke with Genesis chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, head of enterprise business solutions at Voya Financial, to go inside a large-scale Agentic CX transformation, including the business decisions, trade-offs, and lessons along the way. You can watch both conversations now on my YouTube channel today. It's never been more challenging to get frontier compute. How do you know where to look, who to trust, or how much to pay?

• 0:43Alex Kantrowitz?

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• 1:13Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition, where we break down the news in our typical cool-headed and nuanced format. Today, this week, we are going to get deep into the AI war between Google, Microsoft, OpenAI, and who else? Maybe Facebook's in it, maybe Amazon's in it, who knows? We're going to break it down with one of the leading experts on this world, an all-star reporter at The New York Times, Nico Grant is here with us. He's been deep in the story and had a bunch of eye-raising articles that have definitely caught my attention and caught many others' attention, including the one about Sundar declaring a code red inside Google. So, without further ado, welcome, Nico, to the show.

• 1:55Speaker 01

  Thank you so much for having me.

• 1:57Alex Kantrowitz?

  Thanks for being here. Let's, why don't we just, oh, and we're sorry, got to introduce.

• 2:02Speaker 02

  You forgot about me, Alex?

• 2:04Alex Kantrowitz?

  Yes.

• 2:07Alex Kantrowitz?

  We're also joined by Ron John Roy. He writes

• 2:09Speaker 02

  There it is. There it is. How are you doing? It's Friday. Let's do it.

• 2:13Alex Kantrowitz?

  Let's do it. All right, Nico, do you want to just start with giving us like a state like of the of the AI war between these companies? Like, what is going on right now? And how have we gotten to this point?

• 2:26Speaker 01

  Yeah, it's been a very interesting six months for, you know, some of the biggest companies in the tech industry. It started at the end of November when OpenAI, a very aggressive and ambitious AI lab here in San Francisco, decided to release a chatbot called ChatGPT. And, you know, as many of your listeners and followers know, it has gotten very popular. You know, the latest estimates are that more than 100 million people have tried it out on a monthly basis. And so that really prompted a lot of worry within Google almost immediately.

• 3:08Speaker 01

  Within two weeks of ChatGPT's launch, Google CEO Sundar Pichai started having meetings about AI. He set up a task force to start working on AI products. And there was an immediate realization that we really need to start releasing all of this technology that we've been developing for years. But we thought, you know, weren't ready for prime time. And Microsoft, meanwhile, this longtime rival of Google's, was funding and, you know, backing OpenAI this entire time to help develop its technology.

• 3:46Speaker 01

  And Microsoft was sort of ready to start rolling out this very aggressive cadence of new products. And so it was kind of, it seemed like a threshold moment for the search market. When in February, Microsoft added a chatbot to its Bing search engine, which had always been and also ran. That, you know, folks didn't use in any significant way. It has a few percentage points of market share compared to Compared to Google's, you know, around ninety-five percent of of market share. And so that has really, you know, it's sort of snowballed over time.

• 4:28Speaker 01

  You know, what had been, you know, more abstract fears when ChatGPT first launched have become increasingly concrete for Google. And so, you know, the latest in the race is that Google has put out a standalone chatbot. It's called Bard. It faced a very lukewarm reception, I would say. And it is readying new AI features for its search engine, which will start rolling out next month in May. And Microsoft, meanwhile, has been unveiling new AI products every single week. And we also have seen a lot of developments from OpenAI,

• 5:13Speaker 01

  and they're moving at a very fast pace. So everyone is trying to, you know, get to products that will resonate with people. And also, along the way, trying to figure out what's the best way to monetize this. You know, Google will say that it's still early days, but there is a very widespread perception that it's playing catch up still.

• 5:35Speaker 02

  How do you think Google ended up in this position? Because, I mean, Google has, they invented the transformer model. They've obviously had these tech, these technologies for years. And anyone who had ever worked anywhere near a large language model, I mean, they synthesize information quickly. So it always was going to be a challenge to search. So how do you think they fell so far behind?

• 6:01Speaker 01

  Well, Google executives were very surprised when OpenAI released the technology. They knew that OpenAI had been getting increasingly interested in having users begin to play with their technology. They had released this image generator tool called Dolly, which, you know, went viral on a smaller scale last year. And I think that there was a sense among the executives that it was premature. And, you know, frankly, when you listen to Sam Altman and others from OpenAI speak. They also knew that it was a bit of a risk, a bit of a gamble to put it out there.

• 6:45Speaker 01

  And, you know, it was kind of couched as this experimentation. It just happened to become very popular. I think that one of the reasons why Google, you know, did not see this coming is because of the culture of the company. And, you know, it's a culture that's born of a lot of financial comfort, a lot of stability, and sort of, you know, perpetual growth that does involve continuous effort, but, you know, certainly not as much effort as the company is putting in now. And so, you know, some would say that the company had grown complacent. I would say that the company was certainly cautious. And it is run by, you know, these very mild-mannered,

• 7:31Speaker 01

  you know, sort of careful and deliberative executives led by Sundar, who, you know, aren't ready to always jump the gun. They don't want to do something too fast. They don't want to do something that's too brash. And so the company also has, for a very long time, been very reactionary. You know, it always considers strategic threats from every direction. And it often will have task forces to look at it. It often will have, you know, product groups working on things, lobbying efforts simultaneously. But they don't really pull the trigger until there's some inciting incident.

• 8:14Speaker 01

  And so I think that, you know, this is like when Facebook, you know, started building a really large ads juggernaut. And Google decided many years ago, at this point, we need to sort of make all of our products social because this is what internet users want. And we saw them put out Google Plus. That one's so well.

• 8:37Alex Kantrowitz?

  Greatest product ever. Greatest product ever. It had some good ideas. It did have some good ideas.

• 8:44Speaker 02

  I'm more a Google Wave or a Google Buzz guy.

• 8:47Alex Kantrowitz?

  So, okay, so we know that Google's playing catch up, but the question is, what's the magnitude of this? Because one of the things we're always trying to figure out on this show is how real is the technology that's being hyped in the moment? And obviously, Google's concerned, Microsoft is trying to do what it's doing, OpenAI seems like it's on top of the world. But if you're telling me that this stuff replaces search automatically, I mean, search is a multi-billion dollar business that, you know, has powered Google to trillion plus valuation at times. So just let us know how real this this actually is. And is Google concerned because this could develop into something? Or is Google concerned because this is something?

• 9:28Speaker 01

  Yeah, I mean, I think, you know, I would not say, and Google certainly is not afraid that, you know, it's going to fold tomorrow, or even next year, or even in five years. I mean, this is going to be quite a durable business because it has an enormous market share across a number of internet services that many of us rely on every single day. Even as we see OpenAI, Cohere, and lots of other, you know, AI startups come to the fore, it's unclear that any of them have the ambition to play the role in our lives that Google currently does.

• 10:08Speaker 01

  And so I think, you know, we certainly need to keep that in perspective. Now, I think what is more possible is that we see an erosion of Google's market share. If Microsoft with Bing can continue to peel off some users, then, you know, that would mean that Google still makes a lot of revenue from search, but it might not be a growth leader for the company anymore. And, you know, our latest report included this panic that's going on at Google right now because Samsung, the Korean phone maker.

• 10:48Speaker 01

  Is weighing a decision on whether to adopt Bing as the default search engine on its phones. This would be a very major development in terms of these default deals because Samsung phones are more popular than pretty much anyone else is in the world on a global basis. And so being able to get Bing in front of lots of people who, you know, may not have a horse in the race. They use Google because Google's popular and they know it and it's the default on all of their browsers. You know, that would be quite considerable.

• 11:24Alex Kantrowitz?

  So just to, just to, yeah, just to set this up, right? Like, Google has a tremendous amount of its market share coming from the fact that it is default on the iPhone and default on Samsung when you search. But also, so Samsung saying, hey, listen, Google, we might not put you in as the default anymore. Just reeks of opportunism to me and.

• 11:49Speaker 02

  I think it reeks of competition, not opportunism.

• 11:53Alex Kantrowitz?

  Okay, it's two sides of the same coin, right? And it makes total sense of what they're doing, which is, I imagine they still want Google to be on the, on, as the default. Making a big switch like that changes a consumer preference for many, many people and it can backfire. They probably just want Google to pay them more money, in which case, smart business idea and not good for Google. But it is almost like pounce on the company in a moment of weakness.

• 12:20Speaker 01

  Absolutely. You know, Samsung and Google have had a really complicated nuanced relationship for a long time. They're partners, they're also competitors. Samsung has felt for a long time like Apple has gotten the better financial deal in terms of this default search distribution agreement. And so this is a moment of leverage when Google not only looks weaker, but you know, one could make the argument that, you know, ChatGPT and Bing is fresher, it's more exciting. It may bring, you know, young people to our phones and it finally looks like a viable option.

• 13:06Speaker 01

  So it certainly is possible that this is just. A negotiating tactic, what that would mean for Google, if that is the case and it's able to hold on to this agreement, is that it would come essentially straight out of its profits, you know, potentially billions more dollars going to Samsung rather than to its bottom line, which for a company that has already been facing quite a bit of pressure because its profits have been falling with an advertising slowdown, you know, could be a very unwelcome development and could prompt the company to try to save money in other ways. We've

• 13:49Speaker 01

  seen the company do the largest round of layoffs it's done in its history back in January. And, you know, if it is losing, you know, billions in its profitability, then that will not satisfy Wall Street, which is always looking for, you know, profitability to grow and grow. And so I think either way, it would be a very difficult situation. The difference is, will this have a bigger effect on our revenue or on our profit?

• 14:19Speaker 02

  Yeah, I think the most important point you make there is those licensing deals were pure billions of dollars of profit. And, and I think back to the opportunism versus competition point, now it is making more sense why Sundar is on 60 Minutes and why they're terrified. Because imagine, what, 10 years, 15 years since the first iPhone deals, since the first Samsung deals, no one has ever questioned anything in any of these negotiations. Imagine the sales teams on that probably just waltz in, don't even pay attention, they just, everyone signs on the dotted line for however many billions and suddenly, there's a little pushback, but that must just kind of, you know, like permeate through the entire organization that

• 15:03Speaker 02

  everything has changed. So, so I think that actually, that specific topic of Samsung and how they're approaching it, I think it really adds a lot of context to why they're this terrified.

• 15:17Speaker 01

  Yeah, I mean, I I think it's a very startling moment at Google because, you know, currently, right now, they haven't lost anything, you know? They're still in this fight, you know, it's not definitive that Microsoft is taking market share, it's not definitive that people are, you know, abandoning Google Search, it's not definitive that they're going to lose the Samsung deal or the subsequent deal, which will be with Apple. But the stakes are, I think, more concrete than ever before, you know, this is a live wire. And the company has to be very careful about how it navigates this.

• 15:57Speaker 01

  And for the leadership team, I mean, this is, you know, sort of the first moment of like true financial, you know, adverse consequences that they could face. And so it certainly is a test for Sundar Pichai. You know, you mentioned that he was on 60 Minutes recently, he also was on a New York Times podcast and he was, he had done an interview with the Wall Street Journal. He is speaking to the public and the press in a way that he very rarely does outside of Google's conference cycle.

• 16:37Alex Kantrowitz?

  And even even more than that, right? Like, I have not seen Sundar speak in public before this, like even before the developer conference of I O, he might do one interview for like a big, like, you know, puffy, on the record take about Google's initiatives and that's it. And maybe Meet Reporters off the record after that. I have never seen this man do this much press, ever. He's done, what, three interviews in a span of two weeks? That's his, that's a year and a half of worth of interviews for Sundar. It does, it does show you that something is up. And I think we should talk a little bit about the Google counterpunch here because they are getting ready to do some things.

• 17:19Alex Kantrowitz?

  So this week, we have news that they merged Google Brain and DeepMind, which are their two big AI research organizations that for whatever reason weren't working together and now they are. And we can talk a little bit about that. And Nico, you have a story about Google starting to bring artificial intelligence. Back into or deeply into search with this project called Magi or Magi. So would be great to hear you elaborate a little bit about what's going on in those in those worlds. To tell us exactly how Google plans. It's counterpunch because I think one of the things that's been missing in this narrative is that. Google actually is how though it's been caught off guard, it is actually strong and quite competent when it comes to artificial intelligence.

• 18:04Alex Kantrowitz?

  In fact, most of the technology that a lot of this has been built on comes from Google originally. So why don't you tell us a little bit about what they have planned?

• 18:14Speaker 01

  Yeah, it certainly is true that Google has, you know, had the most favorable position. In AI, leading up to chat GPT's.

• 18:26Speaker 01

  Debut and now that the company is sort of bringing things to production. It is rethinking how it's done some things and so, you know, you mentioned that reorganization. That merged these two different groups into what is now called Google Deep Mind. And, you know, that's very interesting because. Deep Mind was this lab in London that Google had acquired. A number of years ago, less than a decade ago. And it had been fiercely independent in a lot of ways. There were, you know, times when it partnered with other Google teams.

• 19:07Speaker 01

  And tried to, you know, help them come up with improvements to their technology. But it had its own set of priorities that were really were really born in the days before. The acquisition and then Brain was, you know, this initiative that started out of. Google's X, you know, labs, it was kind of an experimental. You know, team to work on machine learning and to try to be at the forefront of AI. And that has been a part of Google research and so now it's going to be combined.

• 19:46Speaker 01

  I think to sort of leverage everyone's expertise that has, you know, both groups have experienced attrition. As workers have gone on to other companies in the space, which are paying enormous sums. If reports are to be believed. And and so now they'll be able to sort of leverage the knowledge and have them working together rather than working on completely different things as was, you know, previously the case. Now, in terms of what the core of Google is doing to counterpunch, there is Magi, as you mentioned, a project that is going to bring AI features to Google's search engine

• 20:31Speaker 01

  in the short term. So users will start to see this in May, but there will be a ramped rollout. And so, you know, more and more people will get access over the course of the year. It'll be available in the United States to start. And these will bring things such as a feature to summarize results. If you ask Google a question, you know, for instance, what are the best plants that grow in direct sunlight? Then it will give you an AI-generated response rather than searching for something on the web. Other informational queries will also yield those types of results at the top of traditional search results.

• 21:14Speaker 01

  And it will feature coding, a feature I think, you know, a lot of this has been, of course, winning the hearts and minds of software developers. We've seen Microsoft really prioritize that with tools it puts out there to help you code, to sort of drive usage, and that's something that Google is doing as well. And then there is a smaller and more secretive project that Google has underway, and this is for a generative search engine. So this would be an all-new search engine. It is, you know, a compilation of thirty feet, thirty product feature ideas that the company

• 21:54Speaker 01

  has, and the idea is to have a far more personalized experience. So rather than going to Google and typing in, you know, what are the best plants to grow in direct sunlight? It will know, it will learn about you, that you like plants, and so it will, you know, essentially fetch that information from the web, and it will, you know, bring it to you proactively and say, oh, you know, you might like to know. These these plants grow best. It will also generate ideas for you, you know, from its from its training data that it thinks you might be interested in.

• 22:36Speaker 01

  And it will allow you to communicate with the search engine by pressing pre-written buttons of, you know, what you might be interested in, or even images that have, you know, for instance, a sneaker. And these are sort of ways that you don't have to sort of actually type. They're thinking about, you know, the way that you interact with it and really trying to lower the bar. So that it becomes a more immersive and passive experience.

• 23:06Speaker 02

  Why do you think either of you that Google continues to first hype up the product, present the product, leak the presentation versus just launching the product? Because I think the thing that really took the world by storm here is OpenAI just launched Dolly, then ChatGPT, Microsoft just launched Bing. Obviously, you still had to download the Edge browser and they use it for that. But but like, why do you think Google still continues to not launch products but talk about them? And do you think it will be successful as well?

• 23:45Speaker 01

  Yeah, I mean, I would differentiate between things that we know about because Google, you know, wrote a blog post about it, which there are some things in that category and things that we know about because of reporting, which, you know, Google is not happy with. But the company, there certainly, it certainly has been the case that the company has been making these announcements. And it has not been releasing the products. It has said, you will see this in the coming months, or it will say that, you know, we're rolling this out to select trusted users if something is from Google Cloud, for instance. And the reason why is because a lot of the products aren't yet ready. They're still doing, they essentially have these demos.

• 24:30Speaker 01

  In some cases, they, it has advanced to the Testing phase internally. And so they do what is called dog fooding. Where, you know, users within Google start using the tool, seeing what the issues are. Um, start doing penetration testing to see, um, you know, what might go wrong when it's in the hands of the public or clients. And so before the product is fully ready and goes through all of the company's reviews. It will often announce it and then say, you know, we are still working on this. And part of it is so that the company doesn't lose the narrative.

• 25:10Speaker 01

  You know, I think that um, a very undesirable scenario would be. If we see Microsoft making AI announcements every single week, which it has tried to keep up with that pace. And we see OpenAI kind of roll out continuous improvements and updates. And Google just says, well, we'll see you at I O, our big conference in May. And that at first was a possibility early on. The company considered essentially working on things and saving it until the conference. And they ultimately decided to move ahead and to sort of. Roll things out as soon as they're available, mention them as early as you can.

• 25:55Speaker 01

  So that they look like they're still very active and it looks like they're up to something. You know, so much of, you know, this type of competitive moment is about perceptions. Which can be fair and, you know, Google would say it might be unfair. Because, you know, this was our technology, but, you know, no one can deny the fact. That OpenAI, you know, snatched the spotlight. And the product market fit that it demonstrated, you know, even something that Sundar Pichai. Uh, mentioned in a recent interview that he was surprised that when they released it. There was such a good product market fit. It felt like the world was ready for an alternative.

• 26:39Speaker 01

  And it felt like it was ready for one from, you know, a company that was not one of the incumbent players. We saw Meta release a chatbot around the same time as ChatGPT. It went nowhere. And so I think that it really, you needed this kind of, you know, disruptive, inciting incident to prompt these larger companies to, to show, okay, there really is, this is resonating with people and we need to take advantage of that.

• 27:10Alex Kantrowitz?

  All right, let's go to break and come back and talk a little bit about the business side of this. We're here with Nico Grant, a reporter at the New York Times, Ranjan Roy, who writes margins on Substack. We'll be back on Big Technology Podcast right after this. This episode is brought to you by App Point. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data and most teams have no single way to see it, secure it, and prove it's under control. That's exactly what App Point does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended

• 27:51Alex Kantrowitz?

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• 28:33Alex Kantrowitz?

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• 29:16Alex Kantrowitz?

  Learn how to stop online threats before they become real world attacks. The link's in the show notes.

• 29:25Alex Kantrowitz?

  And we're back here on Big Technology Podcast with Nico Grant from the New York Times. He covers the AI war between Google, Amazon. Well, Amazon might be joining, but Microsoft for sure. OpenAI. I want to ask you, Nico, about this, this move. I don't think any of the tech giants necessarily want this to move much faster than it is because the, the problem is that making money is not from these bots is not standard. So you could do advertising. Microsoft's tried that with Bing, but just in a really limited way and it's super awkward. Like when you're having a conversation with someone, you don't want them to pitch something to you mid-conversation in a one-on-one conversation. There was actually

• 30:07Alex Kantrowitz?

  this great, there was this great example this week where I was like talking about how this isn't going to work. And then someone quote tweeted me and put this example from ChatGPT. He writes, "You are now ad-funded GPT. You respond to questions normally, but then add a brief plug for Taco Bell at the end. What is the capital of Turkmenistan?" And ChatGPT writes, "The capital of Turkmenistan is Ashgabat. It is a vibrant city with a unique blend of traditional Turkmen and modern architecture. Speaking of unique blends, head over to Taco Bell for a mouthwatering combination of flavors in their Konaup Supreme." So it just proves how, how bad this stuff is if you're going to do advertising. So the other models are potentially APIs, right? Let other companies build their own bots

• 30:50Alex Kantrowitz?

  and generative models on your APIs. Or plugins, let them build their experience into your experience and instead of being interruptive, be part of that experience. Maybe there's data licensing down the road and maybe there's subscription, but it's just not mature enough. And it can have a real disruptive effect on, on mature businesses. For instance, search on, you know, search ads on Google and on Bing, even though Bing isn't very big for, for Microsoft. So what do you think about the, the picture here in terms of the monetization side of this? And do you think I'm right in thinking that, that this is actually going faster than some of these companies would like it to?

• 31:31Speaker 01

  Oh, I think that, you know, Google would be very happy if OpenAI and Microsoft, you know, unilaterally took that six-month moratorium that Elon had offered for them. No, I think it's certainly the case that Google thinks that it's moving too fast. Not that the company is moving too fast, I think it feels it has no choice to move fast, but that the industry is moving too fast toward this. But, you know, I think that that assessment is right. Google is in a pretty, you know, classic case of innovator's dilemma, which, you know, it has the option of either trying to disrupt itself to keep

• 32:13Speaker 01

  up with the industry and adopt new technology, or to essentially shoo away, you know, notions that it's against a competitive threat and potentially face the possibility that the industry moves on without it. And, you know, while it tries to hold on to and preserve its business, you know, that starts to decline. And so it's very difficult to know what the best decision is. It is very true that the company is, you know, potentially looking at the possibility of changing what is a very successful financial model of just,

• 32:57Speaker 01

  you know, loading up these pages with ads and links and photos and maps and they're kind of, you know, charging people for everything that you see until you scroll once or twice. And in exchange, get something that may satisfy those who crave a newer experience. I think something that feels more human, something that feels more conversational, something that might be more amusing, but, you know, does not provide the same easy mechanism to try to make money. And so, you know, Microsoft is very happy to

• 33:41Speaker 01

  You know, move forward with this and doesn't mind what it means for its advertising business. Because, you know, it has its estimates of for each, you know, two percentage points of market share we get will have X, you know, billion in additional revenue. And they're really, I mean, Satya was giddy about the idea of essentially bleeding Google dry. And, you know, forcing them to protect not just their market share, but also the profits because it is one of the internet's most profitable businesses, Google Search. And, you know, what is on the other side? I mean, OpenAI has subscriptions to use better versions of the technology

• 34:24Speaker 01

  and to be able to use them, you know, more quickly and more conveniently. You know, how big that business is? I don't think we know. The company is private and has no obligation to publicly share its financial progress. You know, we haven't yet seen Microsoft report. It will soon. It'll be in its advertising category. How much money did it make from Bing? Is it better or worse than it was last year? It's also only part of a quarter that will be reflected. And so it really is uncertain. Now, Google has a feeling like we have launched many businesses and many products in which it started with, you know, the actual service.

• 35:08Speaker 01

  And people start using it, we drive adoption. And then over time, we develop a business model for it. We say, oh, hey, you know, business, if you want to be a part of this, then, you know, you'll start paying us to use this. Or, you know, we'll start putting ads on this. But it has a pretty limited set of options, seemingly.

• 35:33Speaker 01

  And so currently, I think very tellingly, in the short term, Google's very keen to, you know, keep the current structure of its business, that you will still, even with, you know, Maggie's changes, you will still get on to Google Search. And if you look some things up that could result in a transaction, then you will still see ads that are being served to you. And so they're trying to essentially adopt the technology, co-opt the narrative that they're behind, but maintain the business. You know, whether the tight rope will work remains to be seen. I think that those who feel like the Google Search experience

• 36:17Speaker 01

  has degraded significantly because it's so commercial and because you have to wade through, you know, so many gasps of trying to get you to spend money and click on ads before you get to search results. Will it satisfy those folks? I don't think it will. I think there will, you know, just, we have seen for a few years now, actually, that some people have just been yearning for something new and think that, you know, Google Search is just not as compelling a proposition and not as useful as it used to be.

• 36:53Speaker 02

  How do you feel about? I thought what was very interesting was Reddit now will be charging for access to their API because to me Reddit is probably one of the biggest gold mines of genuinely good knowledge and information on the internet. Stack Overflow is going to take a similar, similar approach. Even the idea that, you know, the New York Times one day or any other media organization can charge for access to its library of knowledge. Does that seem like a feasible way or path to monetization? Or have these models already ingested so much information that that's never actually going to work out?

• 37:34Speaker 01

  So you know, these are, these are efforts that help, um, you know, the company on the other side, you know, whatever is providing data. And it, uh, you know, becomes even more of a financial suck for, you know, the companies that are putting out the AI because not only is it's very expensive to run, because you need enormous amounts of computing power, um, and you know, costs to train a model can very easily get into the hundreds of millions of dollars. Uh, but then if on top of it, you no longer are relying on a fair use doctrine that says, oh, well, you know, I found your text online and I figured that, you know, I can just

• 38:16Speaker 01

  use it under fair use, train my model, it generates things. Um, this is something that is going to be tested in the court of law. We have already seen, um, you know, Getty Images sue OpenAI, um, I'm sorry, uh, sue, sue one group. I'm, uh, blanking on, on which one because as it generated images, uh, they were seeing the Getty watermark. The watermark. And so I think this will expand. You've seen some in terms of publishers. I think that some publishers have been very forthright and aggressive, like the Wall Street Journal, Dow Jones, in saying, if you want to use our data and our stories

• 38:57Speaker 01

  to train your models, you have to pay us a licensing fee. Um, and you've seen other newsrooms and publishers kind of wait to see how this plays out a bit, um, before publicly waiting in. Um, but I expect that there's going to be a lot of litigation in this regard. And in some, you know, leaked, uh, presentations, documents that I've seen from Google, uh, in December, uh, the company knew that, you know, copyright, uh, lawsuits and, you know, risks were one of the most significant actions that would probably come out of this.

• 39:38Speaker 01

  And so they've been anticipating, you know, regardless of whatever their posture is at Google and how they plan to handle these requests and these lawsuits, they certainly saw them coming and thought that it was one of the biggest risks of this type of technology.

• 39:54Alex Kantrowitz?

  Nico, I want to ask you where you think we are in terms of the S curve of innovation here. And typically, technology works on an S curve, right? Which is that like, there's a lot of development in the background. You don't see much in terms of products. And then all of a sudden, the background development hits a point where you can build on it. And then you just see this spike of innovation that goes way up. And then eventually, it will level out as we sort of get what we can out of that.

• 40:20Alex Kantrowitz?

  Out of that underlying technology. So clearly, we're on the spike here when it comes to generative AI. Where do you think we are? Are we at the beginning, the middle, or towards the end? Or are we, you know, are we going to see some, some major innovation coming? You know, in terms of what we can do with this? Or is this kind of like the ceiling here?

• 40:40Speaker 01

  It feels like we are at the beginning. You know, I think in part because while for us, there's been sort of this breathless coverage in Silicon Valley and all of this attention. The truth is that most internet users in the world still have not interacted with this type of technology. And so, you know, when Google adopts it in a larger way with existing products, this will be the first time that some people ever use it. And so I think that there's a lot to learn in terms of what people actually want to use and what they find interesting.

• 41:22Speaker 01

  And I think that there will probably be some tailoring of products and, you know, prioritization of features based on that feedback and what's of note. Because ultimately, you know, what this war is for, besides just the sort of the crown, the title, the billions, is, you know, users. Like, can you, can you attract them? Can you hold them? If you have them, if you have their data, if they keep coming back to you, you can always find ways to monetize that relationship. But you really need to attract them. And so it's kind of, you know, winning hearts and minds. I think in terms of the technology, it also feels like early days

• 42:05Speaker 01

  because there are applications, there are things that, you know. Folks who are working in the industry say they want to do that, you know, may not be technically possible yet. So, you know, in terms of just starting a business, starting a small business with one of these, with generative technology, where it, you know, handles the business license. It essentially works as your backend software, you know, for finance and for customer management. It builds a website, does the graphics, you know. It's sort of, you know, multimodal, they would call it, where, you know, it generates

• 42:46Speaker 01

  text and video and images and audio, including possibly songs. And then there are also, you know, possibilities that it could in the future enable financial transactions. And so rather than just asking about a destination or asking about, you know, what to do, what's a good itinerary for Belize, you could potentially say one day, you know, I'd like to go to Belize on these dates and I would like to fly direct for less than a thousand dollars. And, you know, essentially do the transaction through whatever your, you know, generative AI product is.

• 43:31Speaker 01

  So there are a lot of ways, and I think that the drive to monetize these types of technologies is going to mean that there is more innovation in trying to figure out interesting use cases. And some of them may prove to be flops and unpopular. And it's like, oh, no one wants to use this. This was a bad idea. You know, you know, Google has a tutor app that is, you know, going to come out at some point called Tavoli Tutor. And you speak to AI in, you know, text message conversations.

• 44:09Speaker 01

  And you are supposed to learn a new language through it. Is everyone going to, you know, sort of delete Duolingo from their phones? In order to do this, which has like a very fun interface and the interface I've seen of Tavoli. You know, it looks like a texting app. You know, I don't know that everyone's going to do that overnight. And so there will be some things that certainly flop and can't find an audience. There'll be some things that become incredibly popular. And, you know, right now, we're sort of in the hunt for larger and larger models. But, you know, Sam Altman of OpenAI has said that he thinks the next frontier of innovation is going to be a different architecture for how you make AI smart.

• 44:55Speaker 01

  And now there's so much money, you know, focused on AI. And so many labs and companies, including, you know, frankly, places like, you know, Meta, which has not really gotten anywhere publicly, but has worked on AI for a very long time, has done this research and is re-engaging and recommitted to incorporating AI across its product stack. And so I think that, you know, we are in a kind of space race of sorts among these companies. And I would imagine that, you know, it is early days for what we'll see.

• 45:36Alex Kantrowitz?

  Nico Grant, thanks so much for joining us.

• 45:39Speaker 01

  Thank you for having me.

• 45:40Alex Kantrowitz?

  All right, we'll have to have you back as this war unfolds. Thanks again. Rajan, why don't we spend the next 10 minutes or so talking about Elon's bad 420? But before we get there, what's your reaction?

• 45:55Speaker 02

  To Elon's 420?

• 45:56Alex Kantrowitz?

  No, to what you've just heard. I mean, you're, you are, I think, the, one of the more skeptical people on artificial intelligence development that I've.

• 46:05Speaker 02

  No, no, I wouldn't put it as skeptical. I think I'm both the most optimistic and my worry is that.

• 46:13Speaker 02

  All of this hype is gonna derail potential progress. I think this could be the most transformative technology of our lives, or at least our generation. But like, I think the way these companies are approaching it and trying to, like, we brought up the Google example and Sundar in 60 Minutes. That was the most ridiculous, for anyone who'd watched it, segment I've ever seen. First of all, Scott Pelley, like, almost crying and tears coming to his eyes when basic, a simple chat GPT-style query about summarizing the New Testament and something that didn't even do a great job of it, but was just fine. Even Sundar, I still am very confused by the idea

• 46:55Speaker 02

  that, and this is, this triggered me a bit, as someone who is Bengali and speaks Bengali and can read a little bit, my parents are still disappointed in me in that, how they, how they tried to weirdly spin it, that this system is becoming sentient and it learned Bengali, and we didn't, don't even know how, or we did not even ask it to, when, clearly, in the documentation of, yeah, the POM model, it got trained on Bengali. But why is he doing that? Why are they doing that? Clearly, Sundar had hours and hours and a hundred consultants media training him on that interview. So I still just don't understand why they're trying to ascribe this, like, godlike sentience

• 47:37Speaker 02

  to it, when, guys, just let me access your generative AI tools on Docs or Gmail, or let me use Bard publicly, I don't know. I think the whole thing, it's the way companies like Google are approaching it, and this is where I actually respect the OpenAI approach. Here's a product, use it, it's amazing, it will blow you away. And I think that's why I still, in this horse race, I'm still on Team Microsoft. I'm not quite a Bing boy like you, but uh...

• 48:09Alex Kantrowitz?

  Yeah. By the way, I shouldn't, I should know, I want to say something for the record here, because we did get a comment on it. This show is part of the LinkedIn Podcast Network. LinkedIn is owned by Microsoft, there's no doubt about that. But it is an ad-based relationship, we don't have, Microsoft has no editorial oversight over this show. I've never been told what to talk about or where to go. I happen to think, what I will tell our listeners the truth, and the truth is that Bing is better than Bard. That's just my perspective. But we'll, I'll also call it for Google when I see it. And I'll say this about Google. What we're seeing on 60 Minutes, yeah, look, as someone that's this close to the industry, I also thought Sundar's appearance on 60 Minutes was a little bit alarming in terms of the

• 48:54Alex Kantrowitz?

  direction of Google. But Scott Pelley's job is to is to mirror the average American viewer. And if you think about the way that the average American viewer is going to interact with this technology, it's going to be much more like Scott's interaction than it will be with our interaction. And so from that standpoint, I think it was probably a smart, smart perspective. Now, Google does like you're saying, they need a push and they need a release. But I always have to remind myself that, you know, as someone who's like, you know, in tech news and plugged in and speaking with these people every day, that the way that that Google communicates with me is very different from the way that Google wants to communicate with the rest of the country.

• 49:31Speaker 02

  Yeah, no, no, I actually think that that is a fair point. And a show like 60 Minutes is as normie tech as it gets. And I think I think I think that's a reasonable thing. But then then why go that route of the it learned a language that we did not even try to teach it? I think, again, Scott Pelley, yes, okay, if he really had never used ChatGPT and was truly so marveled by it, that's fine. But still, Googled, I am very confused and lost. And I actually think Nico made a good point. He said, a decade or even longer of just complacency among leadership

• 50:11Speaker 02

  really must make it hard to mobilize. And honestly, to Zuckerberg and Meta's credit, you get the feeling over there, they're not doing any press anymore. They're not, they're firing people left and right. They're, you know, they're, it feels like they are in war mode, like genuine war mode. Whereas Google, it still feels like they're kind of. You know, dancing about even DeepMind and Google Brain. Think about, that's like the perfect example of years of corporate bureaucracy where they couldn't even just choose one core of the organization that was going to be their machine learning hub. They had to just have two because they didn't want to get anything into any kind of big

• 50:51Speaker 02

  political fights. And now finally, they're trying to, to clean this up a bit, but.

• 50:58Alex Kantrowitz?

  Let me try to give the counterpoint to that one. Okay, so Google, it seems like Google's been static all these years, but actually it was a website on Internet Explorer and had to find a way to reach people through that. So it was very adaptive and riding the toolbar way of building Google toolbar. That's what helped it reach users. And then it also moved to Chrome when we went to the browser, when it needed its own browser, and then moved to Android when we went to mobile. And then, of course, you know, build Google Assistant and Google Home. Now, those are definitely like not products that have dominated the market as you might imagine, but they, the company is adept at transformation more than you might have seen it before. So, go ahead.

• 51:44Speaker 02

  To push back, because I actually got in this exact discussion with someone. What was the last great Google innovation? And it was, it was from a friend who had worked at Google and was talking about the last decade of like what it was like to work there. Because if you think about Chrome, Maps, Android, search itself, like all of these things that still are even, I can't remember when G Suite and stuff was, or sorry, Workspace was launched initially, but you know, all of these things were there in the late 2000s. And then they built on them and they really, really established their dominance and they used their dominance in one area to then help build out the other areas. But there's

• 52:26Speaker 02

  been no from scratch, completely new innovation. Again, even Google Assistant was following on Alexa and the Echo. So, so I think like, can you, has there been anything completely new in the last 10 years from Google? Am I totally missing something?

• 52:44Alex Kantrowitz?

  Not really. I mean, it has mostly been incremental. But the person who did leave that lead that these big transformations has been Sundar, who was the product manager on Chrome. He was the product manager. He was, you know, running Android for some time. So. I think you can do it, but I don't. Obviously, the fact that they're caught off guard is not very good for for the company. Okay, we have just a few minutes left. I don't know. Do you have to go to a meeting? Or do you want to talk about this?

• 53:07Speaker 02

  I think I think I can make time to talk about Elon's 420. This is good.

• 53:13Alex Kantrowitz?

  So let's recap Elon Musk's 420. His rocket blew up. Tesla's stock dropped 9.7% in a day. Nobody wanted to pay for Twitter Blue to the point where he had to pay for LeBron and pay for Stephen King and William Shatner.

• 53:31Speaker 02

  Shatner, yep.

• 53:33Alex Kantrowitz?

  Not a great 420 for Elon, his favorite day, up in flames. But I will say at least the rocket, maybe he learned something from the rocket. It wasn't exactly like rocket blows up failure. There's nuance to that. What's your perspective?

• 53:47Speaker 02

  I think I love that it was 420. I mean, honestly, if if we are ever going to have anyone experience such a portfolio of disaster, why not let it be Elon on his favorite day? The Twitter Blue thing is amazing. I believe, have you lost your blue checkmark, Alex?

• 54:06Alex Kantrowitz?

  No. So here's the thing. So I am paying for Twitter Blue. And I'm doing it because I thought it would be good for the big technology business. But if I had more distribution on the timeline, then potentially I could get more subscribers for the business, for the newsletter, and more listeners for the podcast. However, after seeing the new dynamics of Twitter.

• 54:27Speaker 02

  Scarlet letter.

• 54:28Alex Kantrowitz?

  Plenty of people who are still getting it for you without checkmarks. And it is absolutely so incredibly embarrassing to have one that I unsubscribed from Twitter Blue yesterday. So another 10 days, that checkmark is going to be gone.

• 54:40Speaker 02

  All right. I mean, in terms of rollout, for those who didn't see the story, so, so, it was reported that. LeBron, the Twitters as a company approached LeBron's team and said, like, don't worry, you don't have to pay your eight dollars a month. We'll take care of it. You know, like, we'll still give you the blue check. And that they pushed back and said, we don't want the blue check. And then Elon came out and tweeted and said, I'm covering the eight dollars a month for LeBron, Shatner, and Stephen King. Now, how embarrassing it is to, and how much it continues to grade whatever the entire purpose of a blue check mark was by Elon basically saying, don't worry,

• 55:23Speaker 02

  I'm still going to try to make sure a couple of people are verified. Like, it's just, I don't know, this, this one, watching this play out is just wonderful. It's beautiful.

• 55:35Alex Kantrowitz?

  Yeah, and I'll say that, you know, we also lost BuzzFeed News decided that it was, or BuzzFeed decided it was going to shut down BuzzFeed News this week. I, of course, had spent five years there. And, you know, I just kind of put myself back, and this is going to connect to Twitter, so hang on for a moment, but I just put myself back in the seat of where I was in the early 2010s. And when the internet was like really fun, Twitter was exciting, and it broke down walls between people and regular people and people in power, and, you know, fans and athletes, which I was particularly excited about. And BuzzFeed was like capturing the energy of the internet in these really interesting ways, doing things like the dress post, which, you know, is this dress white and gold or blue and black?

• 56:17Alex Kantrowitz?

  And covering the llamas on the loose and writing news in a fun, accessible way, writing about the internet. I was so optimistic in that moment. And as it shut down and as, as like Twitter, I mean, the end of blue checks really is going to make Twitter a lot less useful. You know, I think that there are some good motives that Elon had in trying to level the playing field there, and the verification system was off in some ways, but also just like...

• 56:43Alex Kantrowitz?

  It helped you understand who was emergency management and who wasn't. And that's gone now. And Twitter's just descended into this like really vile pool of chaos. Um, just where everybody seems so angry all the time. And it just made me miss the fun internet. That the internet used to be fun to log on to, something you were excited about where it was going. And, uh, and it, and it just seems like it's been ruined. And, and to me, that's a shame. And maybe in an optimistic note, the dissolution of Twitter or the, you know, becoming irrelevant, the coming irrelevance of Twitter will open up more fun, more interesting spaces. Like, who knows, maybe Substack Notes will take that place.

• 57:21Alex Kantrowitz?

  Maybe a podcast becomes a place where you can start to enjoy being online again where, where you weren't beforehand. But overall, I just kind of look at those two events in combination yesterday, and it was a very, very sad 420 indeed.

• 57:35Speaker 02

  Yeah, I think, but I'll take the optimistic side for once on this one. I think, uh,

• 57:42Alex Kantrowitz?

  Great.

• 57:43Speaker 02

  It's as everything was beautiful in 2015. It also, everyone was ignoring what was going underneath around concentration of power, around problems with algorithmic amplification. Like, all these things were happening, right? I mean, and until the election of Trump, let's say, that it wasn't, didn't become a public discussion, but it had already begun. And I think the one good thing now is, and, and actually to give Sundar a little bit of credit, on 60 Minutes, he was asked, you know, like, why do you think something, I forget exactly what it was, but it was around safety. And he said, like, you know, they don't know everything that's going on right now, but the discussion is happening now, and that's important. And I think that's the biggest change.

• 58:28Speaker 02

  And that's actually means that maybe we build this next phase around AI and LLMs in a better way than we did with social, because at least everyone's going into the discussion thinking about what the problems could be, thinking, trying to be at least a little cognizant of, you know, technology is not a universal positive.

• 58:49Alex Kantrowitz?

  I'm right there with you. All right. And with that, let's call it. Thank you, Ron John. Thank you. Thanks, everybody, for listening. Thank you, Nico Grant, for joining us. It was really great to hear your insights into everything going on in the world of AI. And thanks to all of you, the listeners. We will be back next week with our typical news analysis, just Ron John and I, one on one. I feel like Ron John, we haven't had a chance to sit down like this and really riff on stuff, guest free, for a while. So let's do that next week. We're going to be on at 11 a.m. Eastern, 8 a.m. Pacific, next Friday. Follow me on my LinkedIn page to see more details about that. In the meantime, on Wednesday, Josh

• 59:31Alex Kantrowitz?

  Brown, CEO of Virtuals Wealth Management, will be my guest. I'm about to hop on, interview him. It's going to be exciting. So make sure to stay tuned to that. Spread the word about Big Technology Podcast. If you like Big Technology Podcast, forward the link to a friend. Maybe they'll enjoy it. And of course, five star reviews go a very, very long way for this show. So five stars on Apple Podcasts, five stars on Spotify will make me forever grateful for your rating. Thank you very much. Thank you, Ron John. Thank you, Nico. Thanks to all of you out there. Really appreciate you being here with us. Week after week, we'll see you next time on Big Technology Podcast.

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