Google is winning on every AI front

So... I don't think this is certain. A surprising number of people pay for the ChatGPT app and/or competitors. It's be a >$10bn business already. Could maybe be a >$100bn business long term.

Meanwhile... making money from online ads isn't trivial. When the advertising model works well (eg search/adwords), it is a money faucet. But... it can be very hard to get that money faucet going. No guarantees that Google discover a meaningful business model here... and the innovators' dilema is strong.

Also, Google don't have a great history of getting new businesses up and running regardless of tech chops and timing. Google were pioneers to cloud computing... but amazon and MSFT built better businesses.

At this point, everyone is assuming AI will resolve to a "winner-take-most" game that is all about network effect, scale, barriers to entry and such. Maybe it isn't. Or... maybe LLMs themselves are commodities like ISPs.

The actual business models, at this point, aren't even known.

But not profitable yet.

'Business is the practice of making one's living or making money by producing or buying and selling products (such as goods and services). It is also "any activity or enterprise entered into for profit."' ¹

Until something makes a profit it's a charity or predatory monopoly-in-waiting.²

¹ https://en.wikipedia.org/wiki/Business

² https://en.wikipedia.org/wiki/Predatory_pricing

https://finance.yahoo.com/news/uber-technologies-full-2024-e...

The chip makers are making a bundle

The original idea of ride-sharing made sense but just like airbnb it became an industry and got enshittified.

Especially when post-tarrifs consumption is going to take a huge nosedive

No, it's not a charity or a monopoly-in-waiting.

99.9% of the time, it's an investment hoping to make a profit in the future. And we still call those businesses, even if they're losing money like most businesses do at first.

At this point in college, LLMs are everywhere. It's completely dominating history/english/mass comm fields with respect to writing papers.

Anecdotally all of my working non-tech friends use chatgpt daily.

They're more than willing to expand their moat around AI even if that means multiple unprofitable business for years.

This is incorrect. There are millions of companies in the world that exist to accomplish things other than making a profit, and are also not charities.

I keep hearing this online, but every time I’ve used an Uber recently it’s driven by someone who says they’ve been doing it for a very long time. Seems clear to me that it is worth it for some, but not worth it if you have other better job options or don’t need the marginal income.

There are now commonly corporate goon squads whose job is to drive AI adoption without care for actual impact to results. Usage of AI is the KR.

How so? Amazon were the first with S3 and EC2 including API driven control.

If the chat bot remains useful and can execute on instructions, yes.

If we see a plateau in integrations or abilities, it’ll stagnate.

It was supposed to be a BlackBerry/Blackjack killer at the time.

And then the iPhone was revealed and Google immediately changed Android’s direction to become a touch OS.

I don't understand this sentiment at all. The business model writes itself (so to speak). This is the company that perfected the art of serving up micro-targeted ads to people at the moment they are seeking a solution to a problem. Just swap the search box for a chat bot.

For a while they'll keep the ads off to the side, but over time the ads will become harder and harder to distinguish from the chat bot content. One day, they'll dissapear altogether and companies will pay to subtly bias the AI towards their products and services. It will be subtle--undetectable by end users--but easily quantified and monetized by Google.

Companies will also pay to integrate their products and services into Google's agents. When you ask Gemini for a ride, does Uber or Lyft send a car? (Trick question. Waymo does, of course.) When you ask for a pasta bowl, does Grubhub or Doordash fill the order?

When Gemini writes a boutique CRM for your vegan catering service, what service does it use for seamless biometric authentication, for payment processing, for SMS and email marketing? What payroll service does it suggest could be added on in a couple seconds of auto-generated code?

AI allows Google to continue it's existing business model while opening up new, lucrative opportunities.

When was it, 2006? Almost 20 years ago, back when the company was young.

Just because the first LLM product people paid for was a chatbot does not mean that chat will be the dominant commercial use of AI.

And if the dominant use is agents that replace knowledge workers, then they'll cost closer to $2000 per month than $20 or free, and an ad-based business model won't work.

Perhaps... but perhaps not. A chatbot instead of a search box may not be how the future looks. Also... a chatbot prompt may not (probably won't) translate from search query smoothly... in a Way That keep ad markets intact.

That "perfected art" of search advertising is highly optimized. You (probably) loose all of that in transition. Any new advertising products will be intrepid territory.

You could not have predicted in advance that search advertising would dwarf video (yourube) advertising as a segment.

Meanwhile... they need to keep their market share at 90%.

The actual business models and revenue sources are still unknown. Consumer subscriptions happens to be the first major model. Ads still aren't. Many other models could dwarf either of these.

It's very early to call the final score.

But a majority of chatbot usage is not searching for the solution to a problem. And if he Chatbot is serving the ads when I’m using it for creative writing, reformatting text, having a python function, written, etc, I’m going to be annoyed and switch to a different product.

Search is all about information retrieval. AI is all about task accomplishment. I don’t think ads work well in the latter , perhaps some subset, like the task is really complicated or the AI can tell the user is failing to achieve it. But I don’t think it’s nearly as could have a fit as search.

This also means that they sometimes fleece tourists but when they figure you know the city well they don't dare :) Often if they take one wrong turn I make a scene about frowning and looking out of the window and then they quickly get back on track. Of course that's another usecase where uber would be better, if you don't know the city you're in.

In a gold rush, the folks that sell pickaxes make a reliable living.

I was guessing they meant something like the net profit only came from a weird tax thing or something.

I doubt the depiction implied by "surprising number". Marketing types and CEO's who would love 100% profit and only paying the electricity bill for an all AI workforce would believe that. Most people, especially most technical people would not believe that there is a "surprising number" of saps paying for so-called AI.

I also agree the business models aren't known. That's part of any hype cycle. I think those in the best position here are those with an existing product(s) and user base to capitalize on the auto complete on crack kinda feature. It will become so cheap to operate and so ubiquitous in the near future that it absolutely will be seen as a table stakes feature. Yes, commodities.

Not necessarily. Even the original gold rush pickaxe guy Sam Brannan went broke. https://en.wikipedia.org/wiki/Samuel_Brannan

Sam of the current gold rush is selling pickaxes at a loss, telling the investors they'll make it up in volume.

https://x.com/Similarweb/status/1909544985629721070

https://www.reuters.com/technology/artificial-intelligence/o...

"AI" sounds like a great investment. Why waste time investing in businesses when one can invest in something that might become a business. CEOs and employees can accumulate personal weath without any need for the company to be become profitable and succeed.

You may not even notice it when AI does a product placement when it's done opportunistically in creative writing (see Hollywood). There also are plenty of high-intent assistant-type AI tasks.

>in the last day? If you’re only using something once per week, it probably isn’t that important to you.

No, something I use on a weekly basis (which is not necessarily just once a week) is pretty important to me and spinning it otherwise is bizarre.

Google is the frontend to the web for the vast majority of internet users so yeah it gets a lot of daily use. Social media sites are social media sites and are in a league of their own. I don't think i need to explain why they would get a disproportionate amount of daily users.

Many of my Google searches aren't high intent, or any purchase intent at all ("how to spell ___" an embarrassing number of times), but it's profitable for Google as a whole to keep those pieces working for me so that the ads do their thing the rest of the time. There's no reason chatbots can't/won't eventually follow similar models. Whether that's enough to be profitable remains to be seen.

> Search is all about information retrieval. AI is all about task accomplishment.

Same outcome, different intermediate steps. I'm usually searching for information so that I can do something, build something, acquire something, achieve something. Sell me a product for the right price that accomplishes my end goal, and I'm a satisfied customer. How many ads for app builders / coding tools have you seen today? :)

If you sell your pickaxes at a loss to gain market share, or pour all of your revenue into rapid pickaxe store expansion, you’re going to be just as broke as prospectors when the boom goes bust.

And as far as selling pickaxes go, GCP is in a far better position to serve the top of market than OpenAI. Some companies will wire together multiple point solutions but large enterprises will want a consolidated complete stack. GCP already offers you compute clusters and BigQuery and all the rest.

People ask for recipes, how to fix things around the house, for trip itinerary ideas, etc.

In my work I see semi-technical people (like basic python ability) wiring together some workflows and doing fairly interesting analytical things that do solve real problems. They are things that could have been done with regular code already but weren't worth the engineering investment.

In the "real world" I see people generating crummy movies and textbooks now. There is a certain type of person it definitely appeals to.

I'm pretty sure they are the pickaxe manufactures in this case.

She is literally married into the HN crowd.

I think the real AI breakthrough is how to monetize the high usage users.

They invested tens of billions of dollars in destroying the competition to be able to recently gain a return on that investment. One could either write off that previous spending or calculate it into the totality of "Uber". I don't know how Silicon Valley economics works but, presumably, a lot of that previous spending is now in the form of debt which must be serviced out of the current profits. Not that I'm stating that taking on debt is wrong or anything.

yeah thanks no, I'm paying for an Uber. For all the complaints over Ubers business practices, it's hard not to forget how bad taxis were. Regulatory capture is a clear failure mode of capitalism and the free market and that is no more shown than by the taxis cab industry.

So maybe if the AI pickaxe sellers get divorced it could lead to poor financial results, but I'm not sure his story is applicable otherwise.

Pretty much any service job, really...

When I had occasion to take a ride share in Phoenix I'd interrogate the driver about how much they were getting paid because I drove cabs for years and knew how much I would have gotten paid for the same trip.

Let's just say they were getting paid significantly less than I used to for the same work. If you calculated in the expenses of maintaining a car vs. leasing a cab I expect the difference is even greater.

There were a few times where I had just enough money to take public transportation down to get a cab and then snag a couple cash calls to be able to put gas in the car and eat. Then I could start working on paying off the lease and go home at the end of the day with some cash in my pocket -- there were times (not counting when the Super Bowl was in town) where I made my rent in a single day.

But the way it usually works for Silicon Valley companies and other startups is that instead of taking on debt they raise money through selling equity. This is money that doesn't have to be paid back, but it means investors own a large portion of this now-profitable company.

It's changed his entire view of computing.

This doesn’t strike me as zero relevance.

Its products like this (Wells Fargo): https://www.youtube.com/watch?v=Akmga7X9zyg

Great Wells Fargo has an "agent" ... and every one else is talking about how to make their products available for agent based AI.

People don't want 47 different agents to talk to, then want a single end point, they want a "personal assistant" in digital form, a virtual concierge...

And we can't have this, because the open web has been dead for more than a decade.

I consult in this space and 80-90% of what I see is chat bots and RAG.

I don't understand why people believe this: by settling on "unstructured chat" as the API, it means the switching costs are essentially zero. The models may give different results, but as far a plugging a different one in to your app, it's frictionless. I can switch everything to DeepSeek this afternoon.

And yet I probably duck into ChatGPT at least once a month or more (I see a bunch of trivial uses in 2024) mostly as a novelty. Last week I used it a bunch because my wife wanted a logo for a new website. But I could have easily made that logo with another service. ChatGPT serves the same role to me as dozens of other replaceable Internet services that I probably duck into on a weekly basis (e.g., random finance websites, meme generators) but have no essential need for whatsoever. And if I did have an essential need for it, there are at least four well-funded competitors with all the same capabilities, and modestly weaker open weight models.

It is really your view that "any service you use at least once a week must be really important to you?" I bet if you sat down and looked at your web history, you'd find dozens that aren't.

(PS in the course of writing this post I was horrified to find out that I'd started a subscription to the damn thing in 2024 on a different Google account just to fool around with it, and forgot to cancel it, which I just did.)

agree with you on this.

you already see that playing out with Meta and a LOT of companies in China.

Or is this someone who needs writing but can't do it themselves, and if they didn't have the LLM, they would pay a low-end human writer?

Personal/anecdotal experience, but I've bought more stuff out of instagram ads than google ads ever.

Android and mobile are none of these things.

OK? That's fine. I don't think I ever claimed you were a WAU

>And yet I probably duck into ChatGPT at least once a month or more (I see a bunch of trivial uses in 2024) mostly as a novelty.

So you are not a weekly active user then. Maybe not even a monthly active one.

>Last week I used it a bunch because my wife wanted a logo for a new website. But I could have easily made that logo with another service.

Maybe[1], but you didn't. And I doubt your wife needs a new logo every week so again not a weekly active user.

>ChatGPT serves the same role to me as dozens of other replaceable Internet services that I probably duck into on a weekly basis (e.g., random finance websites, meme generators)but have no essential need for whatsoever.

You visit the same exact meme generator or finance site every week? If so, then that site is pretty important to you. If not, then again you're not a weekly active user to it.

If you visit a (but not the same) meme generator every week then clearly creating memes is important to you because I've never visited one in my life.

>And if I did have an essential need for it, there are at least four well-funded competitors with all the same capabilities, and modestly weaker open weight models.

There are well funded alternatives to Google Search too but how many use anything else? Rarely does any valuable niche have no competition.

>It is really your view that "any service you use at least once a week must be really important to you?" I bet if you sat down and looked at your web history, you'd find dozens that aren't.

Yeah it is and so far, you've not actually said anything to indicate the contrary.

[1]ChatGPT had an image generation update recently that made it capable of doing things other services can't. Good chance you could not in fact do what you did (to the same satisfaction) elsewhere. But that's beside my point.

Photopea, for example, seems to be successful and ads displayed on the free tier lets me think that they feel at least these users are willing to see ads while they go about their workflow.

It’s a bit like how DEI was the big thing for a couple years, and now everyone is abandoning it.

Do corporate leaders just constantly chase hype?

Add is a verb meaning to combine 2 things together.

I think companies implement DEI initiatives for different reasons than hype though. Many are now abandoning DEI ostensibly out of fear due to the change in U.S. regime.

A lack of workable business model is probably good for Google (bad for the rest of the world) since it means AI has not done anything economically useful and Google's Search product remains a huge cash cow.

It's funny how the vibe of HN along with real world 's political spectrum have shifted together.

We can now discuss Ads on HN while still being number 1 and number 2 post. Extremism still exists, but it is retreating.

I personally know an engineering manager who would scoff at MLK Day, but in 2020 starting screaming about how it wasn’t enough and we needed Juneteenth too.

AI isn’t hype at Nvidia, and DEI isn’t hype at Patagonia.

But tech industry-wide, they’re both hype.

I'll be happy with a personal assistant with access to my paid APIs.

Well I mean if you say it, then of course it MUST be true I’m sure.

Neither of those things are true where I live.

> at least here in Spain

Well…Spain is Spain. Not the rest of the world.

what I'm not so sure about is how much that generalises beyond the HN/tech-workers bubble (I don't think "people" in OP's comment is as broad and numerous as they think it is).

One time I told one of my Dutch friends I often take a cab to work here in Spain when I'm running late. He thought i was being pompous and showy. But here it's super normal.

Uber (Or cabify which is a local clone and much more popular) here on the other hand is terrible if you don't book it in advance. When I'm standing here on the street it takes 7-10 minutes for them to arrive while I see several taxis passing every minute. So there is just no point. Probably a factor of being unpopular too so the density is low.

I also prefer my money to end up with local people instead of a huge American corporation.

The climate has changed. Some of that is economic at big tech companies. But it’s also a ramping down of a variety of things most employers probably didn’t support but kept their mouths shut about.

I think Uber in the US is a very different beast. But also because the outlook on life is so different there. I recently agreed with an American visitor that we'd go somewhere and we agreed to go by public transport. When I got there he wanted to get an Uber :') Here in Europe public transport is a very different thing. In many cases the metro is even faster than getting a taxi.

PS: What bothers me the most about Uber and Cabify is that they "estimate" that it will take 2 minutes to get a car to you, and then when I try and book one I get a driver that's 10 minutes away :( :( Then I cancel the trip and the drivers are pissed off. I had one time where I got the same driver I cancelled on earlier and he complained a lot even though I cancelled within 10 seconds when I saw how far away he was.

Anyway I have very few good experiences with these services, I only use them to go to the airport now when I can book it in advance. And never Uber anymore, only Cabify.

For me, and a majority where I live, this is applicable to taxis. Which were known for being dirty, late, expensive, prone to attempting to rip you off, if they turned up at all, etc.

Outside of surge charging (in which they are more expensive) ubers are by and large either cheaper, or the same price. With the difference being that 99% of the time if you request one, its going to turn up. And when it does turn up, you know what your going to pay, not have them take a wrong turn at some point and by "mistake" and decide to charge you double. Or tell you they take card and then start making claims about how suddenly they can't etc.

Sounds like europe gets the bad end of the stick in this regard.

However in Romania on the other hand many taxi drivers are scammers or even criminals (one of my colleagues was robbed by one of them). It's also because the maximum taxi fares are too low to actually make a wage so I can kinda understand so I always tip really well (like double the fare or more which is still nothing). Though if they try to scam me they don't get a cent of course.

I keep reminding him that it can hallucinate...