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Google to add AI chat to search, Is Amazon falling behind in the AI race? And could ChatGPT be banned in more countries? Newsletter #18

Harry Harrison

Apr 10, 2023

Google to Add AI Chat to Search
US Labor Market Eases
Twitter’s New Doge Logo
Is Amazon Falling Behind in the Race for AI Domination?
Could ChatGPT Be Banned in More Countries?

Google Search to Get AI Chat Feature

Google CEO Sundar Pichai, told the Wall Street Journal last week that Google plans to add conversational AI features to its search product as it tries to catch up with Microsoft/OpenAI in the space and contends with wider business issues.

Google CEO Sundar Pichai says things will go wrong as people start using ChatGPT rival Bard, details here - India Today — Sundar Pichai became CEO of Alphabet/Google in 2015 and is well respected in the tech industry as a calm and thoughtful leader. How he handles the threat to the company posed by ChatGPT and Microsoft could define his tenure at the company.

The integration of ChatGPT into Bing represents one of the biggest threats to Google in its history at a time when inflation and investor pressure are pushing the company to cut costs.

Google has used AI systems for years to better understand search queries, but appears to have been caught flat-footed with its bungled release of Bard, its supposed competitor to ChatGPT. Microsoft CEO Satya Nadella has taken aim at Google’s dominant search business, saying in February that “a new race is starting with a completely new platform technology.”

Share of Search Market — Google still dominates the search market but ChatGPT has already captured 2% of the market despite being less than 6 months old.

Google already offers AI features in Gmail and its suite of work products but how the new AI search format will be monetized by Google remains to be seen. Search ads currently bring in $162 billion (~56%) of revenue for Alphabet, Google’s parent company, so finding a way to make money from AI-based chatbots is critical to the company’s future.

It has the computing resources and talent necessary to build and monetize an effective AI chatbot search feature but it has yet to do so; so far Microsoft and OpenAI have been leading the way.

US Labor Market

Data out of the US showed that job openings had dropped to their lowest level in nearly two years in February, yet remain high. Conditions in the US job market have been tight with nearly 2 job openings for every unemployed person in January.

This is welcome news for the Federal Reserve and it now has it more leeway when deciding whether to pause interest rate hikes.

Job openings, a measure of labor demand, were down 632,000 to 9.9 million on the last day of February, the lowest level since May 2021. The broad drop in job openings occurred before the recent financial market turmoil, which led to tighter credit conditions and sparked fears of widespread job losses in the economy.

On Friday the latest jobs report showed that the unemployment rate had dropped to 3.5% vs 3.6% expected - making it the first job report in 12 months to come in below expectations.

While the US labor market has kept relatively steady despite other areas of the economy slowing under the weight of interest rate hikes, it’s now starting to show some signs of cooling.

Twitter’s New Doge Logo (aaaand it’s gone)

The price of Dogecoin spiked 30% early last week after Elon Musk decided to change Twitter’s logo from the normal blue bird to an image of the Shiba Inu dog, a symbol closely linked to dogecoin and the wider meme culture.

The Doge meme replaced the blue bird as Twitter’s logo for just 3 days last week.

The change was reverted on Friday and Elon Musk hasn’t really explained why the change was made, except to say that he’s following through on a tweet he made last year proposing to change the logo to an iconic Doge meme.

Elon Musk @elonmusk

As promised

Dogecoin dropped around 8% after the logo change was reverted and as of Sunday, it’s more or less where it was before the change was made.

Is Amazon Falling Behind in the Race for AI Domination?

Amazon Web Services (AWS) announced last week that it’s launching a generative AI accelerator program. The program will be 10 weeks long and is designed to take the most promising generative AI startups around the globe to the next level.

You could be forgiven for thinking that Amazon has fallen behind in the AI race but they likely have a different way to compete with the likes of Microsoft and Google.

The Partnership: Amazon SageMaker and Hugging Face — Hugging Face and Amazon - Will this partnership be the catalyst for the creation of AGI?

Perhaps Amazon’s real strength lies in providing the computing power to the AI companies rather than building the services itself, much like how many people made money providing services to gold diggers rather than digging for gold themselves during the Californian Goldrush in the 1850s.

“Instead of digging for gold, Amazon is in the business of selling shovels” - Anish Mitra, former VP of Growth at Goldman Sachs.

The company might not be able to build a chatbot to rival ChatGPT or Bard or create new AI-based products, but it can offer computing power to the companies trying to. We saw the potential for this earlier in the year with its partnership with Hugging Face, an AI company where developers can share models and one which some believe could lead to the creation of AGI.

Alexa already has 60% of the home voice-assistant market and its dominance in this market and the cloud gives Amazon a great platform to further integrate AI solutions into its products and become a platform for AI.

For investors, the hope is that, as it did with the cloud, Amazon can lay the foundations for an AI development platform early on and get ahead in what will surely be one of the defining industries of the next decade.

Could ChatGPT Be Banned in More Countries?

After Italy decided to ban ChatGPT at the end of March, it now seems that other companies are considering joining them.

The regulators in Italy cited a data-breach at OpenAI that allowed some users to see the conversation titles of others and worries over a lack of age restrictions on ChatGPT as reasons for the ban.

Other countries around Europe including Germany and France are in communication with Italy to understand their basis for the ban and see whether the technology should be restricted in other countries in accordance with EU data protection laws.

Italy Bans ChatGPT Over Privacy Concerns — It’s now banned in Italy but might ChatGPT see further bans in more countries too?

European consumer organization BEUC has called for an investigation from the European Union “into the risks of ChatGPT and similar chatbots for European consumers”.

The Office of the Privacy Commissioner in Canada has also said it’s investigating OpenAI’s use of data to train ChatGPT.

It seems that it’s the use of data, rather than the threat they pose to employment, that’s leading governments to question whether ChatGPT should be banned. But is banning a technology in one country really the answer when VPNs are so readily available and large language models like ChatGPT can be run on a laptop offline?

Google searches for “VPN” since the ChatGPT ban.