CHATGPT AND DALL-E

  • Microsoft has thrown down the gauntlet to Google with its $10 billion check to OpenAI, the artificial intelligence research firm behind ChatGPT and DALL-E.
  • The investment is targeted at packing AI capabilities into Microsoft’s search, software and cloud systems over the next few years. And, at the top of that list is making Bing search engine ChatGPT compatible.
  • Microsoft is clearly looking to disrupt Internet search as we know it, and in that process, plans to claw back the browser market share it lost to Google more than a decade ago.
  • The announcement from the Windows software maker has certainly made the search giant anxious.
  • And the Alphabet-owned company has reacted with Bard — a conversational AI powered by the search giant’s language model. The company has made its search AI available to a select group of users before the general public gets a flavour of its capabilities.
  • Bard is powered by Language Model for Dialogue Applications (LaMDA), which is built on the Transformer architecture.
  • The credit for this neural network-build goes to Google. In fact, this is the same architecture used by several other language models, including Open AI’s ChatGPT and Meta’s Blender Bot.
  • The company based out of Mountain View, California, has been leading the industry on several innovative web tools, starting from its web search.
  • Google pioneered algorithmic search that transformed the way we use Internet. The Silicon Valley giant developed a new way to search the web with its eponymous search engine, enabling users to access information at the click of a button.
  • Around the time when Apple unveiled its iPhone, Google launched its web browser that redefined browsing experience.
  • For people browsing with the unhip Microsoft Internet Explorer, Google Chrome was like a breath of fresh air. The two other prominent browsers, Apple’s Safari and Mozilla’s FireFox, ran on the same legacy code that powered Microsoft’s web browser.

A new perspective

  • Google looked at the browser in a totally new way, allowing Chrome users to run various web-based applications.
  • Its sandboxing feature handled workload as a series of multiple processes instead of a single large process.
  • This helped it keep its browser from crashing, which was common issue with other browsers of that time. Chrome was gradually deployed on Windows and Linux PCs.
  • By 2013, Google Chrome cornered roughly a third of the desktop browser market, and it was gaining more users.
  • But it was still not an important player in the mobile browser market. That’s when the Google veteran behind its browser push was named the head of Android, a move that made the search giant’s ambition clear: mobile browsing is the next phase of growth.
  • The company gradually integrated the fragmented mobile software market with its Android OS and Play Store. That solidified Google’s position in the smartphone market, and also paved the way for CEO Sundar Pichai to take the helm of affairs at Google’s parent Alphabet Inc.
  • Fast forward to January 2023, Google leads the browser market with 65.4% market share, according to data analytics site Statcounter. Microsoft’s Edge and Mozilla’s Firefox have a combined share of less than 10%.

AdTech backbone

  • Driving its way through a well-established browser market, and coming out on top is no ordinary feat in a market which was dominated by Microsoft.
  • But that could not have happened without Google’s revenue-generating advertising business. The company initially sold ad spaces on its search engine, and then set out to disrupt the advertising market.
  • In 2007, the search giant paid $3.1 billion to acquire advertising technology firm DoubleClick. It was an important buy for Google as it made the company become a leader in digital advertising market.
  • The reason was simple. This acquisition gave Google access to both advertisers and websites.
  • Also, right about that time, DoubleClick was going to launch an ad exchange, which allowed advertisers to bid for space in real time to display digital ads.
  • By 2021, Google’s parent, which includes YouTube, generated almost $257 billion in revenue. Of that, over 81% came from Google’s ads business, according to the company’s 2021 annual report.

Tight corner

  • In January, the U.S. Department of Justice, sought to break up Google’s adtech monopoly.
  • The DoJ accused Google of abusing its market position as one of the largest suppliers and online auctioneers of digital ads placed on websites and mobile applications.
  • It is unclear how this break up will work in reality as Google’s Ad Exchange is well integrated with the search giant.
  • It is no more the DoubleClick that Google purchased in 2007. Any fallout from this suit may not have a significant impact on Google’s revenue.
  • But competition from Microsoft will clearly have an impact on Google’s bottom line, if not now, at least in the next few years.
  • And to make matters worse, Bard fumbled in its promotional content. The bot gave out a factually incorrect answer to a question. That goof up sent Google’s stock tumbling and wiped out $100 billion from its market value.

Six years’ work

  • In his blog, he noted that the search giant has been working on AI for the past six years. And now, the only visible product that can highlight those years of hard work has failed to enthuse investors.
  • For Microsoft’s CEO Satya Nadella, this is good news. Several investors could put their money in his company’s stock. And more people could possibly flock to the Bing search engine to browse the web.
  • But that conversion alone won’t be enough to close the roughly 90 percentage point lead Google search engine has against Microsoft’s Bing. It is a long journey, but Microsoft is clearly in an advantageous position.

SOURCE: THE HINDU, THE ECONOMIC TIMES, PIB

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