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Google is winning on every AI front

(www.thealgorithmicbridge.com)
1005 points vinhnx | 24 comments | 12 Apr 25 03:58 UTC | HN request time: 2.307s | source | bottom
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codelord ◴[12 Apr 25 06:51 UTC] No.43661966[source]▶
As an Ex-OpenAI employee I agree with this. Most of the top ML talent at OpenAI already have left to either do their own thing or join other startups. A few are still there but I doubt if they'll be around in a year. The main successful product from OpenAI is the ChatGPT app, but there's a limit on how much you can charge people for subscription fees. I think soon people expect this service to be provided for free and ads would become the main option to make money out of chatbots. The whole time that I was at OpenAI until now GOOG has been the only individual stock that I've been holding. Despite the threat to their search business I think they'll bounce back because they have a lot of cards to play. OpenAI is an annoyance for Google, because they are willing to burn money to get users. Google can't as easily burn money, since they already have billions of users, but also they are a public company and have to answer to investors. But I doubt if OpenAI investors would sign up to give more money to be burned in a year. Google just needs to ease off on the red tape and make their innovations available to users as fast as they can. (And don't let me get started with Sam Altman.)
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netcan ◴[12 Apr 25 09:17 UTC] No.43662766[source]▶
> there's a limit on how much you can charge people for subscription fees. I think soon people expect this service to be provided for free and ads would become the main option to make money out of chatbots.

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.

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1. istjohn ◴[12 Apr 25 14:58 UTC] No.43664955[source]▶
> No guarantees that Google discover a meaningful business model here...

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.

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2. panarky ◴[12 Apr 25 15:13 UTC] No.43665077[source]▶
> chatbots ... provided for free ... ads

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.

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3. netcan ◴[12 Apr 25 15:18 UTC] No.43665127[source]▶
>Just swap the search box for a chat bot.

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%.

4. netcan ◴[12 Apr 25 15:21 UTC] No.43665163[source]▶
True. This is my point too.

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.

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5. brookst ◴[12 Apr 25 15:42 UTC] No.43665339[source]▶
I don’t think it works. Search is the perfect place for ads for exactly the reasons you state: people have high intent.

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.

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6. cgh ◴[12 Apr 25 15:57 UTC] No.43665488[source]▶
Perhaps ironically, I know a guy who uses ChatGPT to write ad copy. The snake eats its own tail.
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7. UltraSane ◴[12 Apr 25 16:04 UTC] No.43665570[source]▶
LLM based advertising has amazing potential when you consider that you can train them to try to persuade people to buy the advertised products and services.
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8. tsimionescu ◴[12 Apr 25 16:22 UTC] No.43665749[source]▶
That seems like a recipe for class action false advertising lawsuits. The AI is extremely likely to make materially false claims, and if this text is an advertisement, whoever placed it is legally liable for that.
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9. Spacecosmonaut ◴[12 Apr 25 17:02 UTC] No.43666131[source]▶
Obviously, an LLM is in a perfect position to decide whether an add can be "injected" into the current conversation. If you're using it for creative writing it will be add free. But chances are you will also use it to solve real world problems where relevant adds can be injected via product or service suggestions.
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10. alienthrowaway ◴[12 Apr 25 17:37 UTC] No.43666415[source]▶
> 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.

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.

11. anon84873628 ◴[12 Apr 25 17:55 UTC] No.43666556[source]▶
The intent will be obvious from the prompt and context. The AI will behave differently when called from a Doc about the yearly sales strategy vs consumer search app.
12. pressbuttons ◴[12 Apr 25 17:59 UTC] No.43666586[source]▶
It doesn't have to be high intent all the time though. Chrome itself is "free" and isn't the actual technical thing serving me ads (the individual websites / ad platforms do that regardless of which browser I'm using), but it keeps me in the Google ecosystem and indirectly supports both data gathering (better ad targeting, profitable) and those actual ad services (sometimes subtly, sometimes in heavy-handed ways like via ad blocker restrictions). Similar arguments to be made with most of the free services like Calendar, Photos, Drive, etc - they drive some subscriptions (just like chatbots), but they're mostly supporting the ads indirectly.

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? :)

13. anon84873628 ◴[12 Apr 25 18:04 UTC] No.43666629{3}[source]▶
I still think it's pretty clear. Google doesn't have to get a new business off the ground, just keep improving the integration into Workspace, Gmail, Cloud, Android etc. I don't see users paying for ChatGPT and then copy/pasting into those other places even if the model is slightly better. Google will just slowly roll out premium plans that include access to AI features.

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.

14. kortilla ◴[12 Apr 25 18:06 UTC] No.43666642[source]▶
The main usage of chatgpt I’ve seen amongst non-programmers is a direct search replacement with tons of opportunity for ads.

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

15. anon84873628 ◴[12 Apr 25 18:11 UTC] No.43666684{3}[source]▶
I don't think we should expect that risk to dissuade these companies. They will plow ahead, fight for years in court, then slightly change the product if forced to ¯\_(ツ)_/¯
16. prettyblocks ◴[12 Apr 25 19:54 UTC] No.43667448[source]▶
How would you track this?
17. powvans ◴[12 Apr 25 20:59 UTC] No.43667899[source]▶
I have shifted the majority of my search for products to ChatGPT. In the past my starting point would have been Amazon or Google. It’s just so much easier to describe what I’m looking for and ask for recommendations that fit my parameters. If I could buy directly from the ChatGPT, I probably would. It’s just as much or more high intent as search.
18. neilv ◴[12 Apr 25 21:49 UTC] No.43668186[source]▶
Is this someone someone working as a writer, who is just phoning it in (LLM-ing it in)?

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?

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19. Izikiel43 ◴[12 Apr 25 22:00 UTC] No.43668231[source]▶
> micro-targeted ads to people at the moment they are seeking a solution to a problem

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

20. longos ◴[12 Apr 25 23:48 UTC] No.43668852[source]▶
Re "going to be annoyed" there is definitely a spectrum starting at benign and culminating to the point of where you switch.

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.

21. hadlock ◴[13 Apr 25 01:16 UTC] No.43669232[source]▶
Chatgpt is effectively a functional search engine for a lot of people. Searching for the answer "how do i braid my daughter's hair?", or, "how do i bake a cake for a birthday party?" can be resolved via tradtitional search and finding a video or blog post, or simply read the result from an LLM. LLM has a lot more functionality overall, but ChatGPT and it's competitors are absolutely an existential threat to Google, as (in my opinion) it's a superior service because it just gives you the best answer, rather than feeding you into whatever 10 blog services that utilize google ads the most this month. Right now ChatGPT doesn't even serve up ads, which is great. I'm almost certain they're selling my info though, as specific one-off stuff I ask ChatGPT about, ends up as ads in Meta social medias the next day.
22. hadlock ◴[13 Apr 25 01:24 UTC] No.43669263{3}[source]▶
A friend of mine works in advertising/marketing guy at the director level (Career ad guy), for big brands like nationwide cell carriers, big box stores etc, but mostly telcom stuff I think, and he uses it every day; he calls it "my second brain". LLM are great at riffing on ideas and brainstorming sessions.
23. niij ◴[13 Apr 25 04:03 UTC] No.43669993{3}[source]▶
"ad" is short for advertisement. That's the word you're looking for here.

Add is a verb meaning to combine 2 things together.

24. michaelbrave ◴[13 Apr 25 05:16 UTC] No.43670265[source]▶
I imagine it would be easy for them to do similar to the TV guides of yesteryear(the company that owned it used it primarily for self promotion with just enough competitor promotion to fly under the radar and still seem useful), where it gives good recommendations sure, but 60-70% of those recommendations are the paid ones or the ones you own for you custom LLM.