Transcription
Foreign, hi! Welcome to another episode of Cold Fusion. Last episode, we took a deep dive into the emerging battle for AI Supremacy between Google and OpenAI, with Microsoft's backing. Just a couple of days later, both Microsoft and Google came out with their announcements. It's just crazy how fast things are moving. So, how did each company go with their announcements? Well, very differently. Microsoft gave an awe-inspiring presentation, while Google scrambled and fumbled. A Google presenter became embarrassed and flustered when she realized that there was no phone to give a live demonstration of what she was talking about. Investors weren't so impressed either, so Google's parent company, Alphabet, lost $100 billion dollars worth of value during and after the presentation. So, sit back, relax, and enjoy the show as we take a look at the biggest war in technology in a very long time.
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You are watching Cold Fusion TV. First of all, I mean, look, I have the greatest of admirations, uh, for Google and what they've done, and, you know, they're, they're an unbelievable company. They're the 800-pound gorilla on this, which is, uh, what they are. And I hope that with our innovation, um, they will definitely want to come out and show that they can dance, and I want people to know that we made them dance. And I think that'll be a great day.
The race for AI dominance is heating up. On February 7th, Microsoft fires the first shot across the bow at Google. They unveil their grand plan for AI. Then, the next day, Google shoots back and unveils their AI. To say that both presentations were unequal would be an understatement. So, let's start with Microsoft. CEO Satya Nadella takes to the stage. He talks about how every walk of life is beginning to be changed by AI, then goes on to talk about the three stages of the web: its birth on PCs and servers, then mobile and apps, and then the next phase will be AI.
Satya and the rest of Microsoft have begun to see an issue with search. The fact is, search hasn't changed in 20 years, and some people think that Google has gotten even less accurate lately because of SEO keyword stuffing. Microsoft's new Edge browser and Bing will be able to do three new things: answer your questions, chat with you, and create new things. To highlight some interesting insights into the current shortfalls of search, they mentioned the statistic that 40% of people search for something and immediately click back out of the result that they got. This means that they can't find what they're looking for, and they calculated that about half of all searches don't get the answers that you want. Most of these are very specific queries based on your personal situation.
Microsoft showed a chart highlighting the issue. You've got search on the x-axis and generative AI on the y-axis. The new Bing will bridge that gap between the two, giving you the power of traditional search with the helpfulness of the good people on Reddit. This chart specifically reminds me of the unveiling of the iPod and iPhone, where Steve Jobs clearly laid out a gap in the market and showed where a new product could fit in to solve it. I think this chart might be historic in the same way.
So, getting onto the new Bing itself, it's running on AI that is quote, "much more powerful than ChatGPT" and tuned specifically for search. In the presentation, Microsoft states that because they already have a search engine, they can now use back-end web indexing and data to efficiently and directly tie into the new version of ChatGPT.
So, onto the new Bing interface. When you type a complex query, you'll get the typical results on the left, and on the right, you'll get a synthesized answer with sourcing. You can ask about current events or future events and get the same experience. A particularly cool example was asking if a specific seat from Ikea would fit in a 2019 Honda Odyssey. If that new loveseat from Ikea is going to fit in the back of my Honda Odyssey, and what you'll see is Bing can actually find the dimensions of the loveseat, the interior space of the car, and then make an estimation as to whether it will fit. In this case, I'm choosing an example of where Bing does not know the answer, and we know, and we know that we can't be definitive about it. And the reason I'm doing that is because we know we won't be able to answer every question every time. But Bing can still provide some helpful information, as you can see on this answer. We also know we'll make our share of mistakes, and as we begin to roll this out, so we've added a quick feedback button at the top of every search so that you can give us feedback and we can learn.
But this was just the beginning. The main feature was the new chat section. Think of this as search with your own personal helper to help you refine your query until you get exactly what you're looking for. This comes in handy for activities like trip planning and shopping research. Let's start with shopping. So, I'm going to look for a 65-inch TV. We give you a good set of answers, but now I want to refine this query. So, I can do that by going to chat. Now, I can either swipe up with my fingers, or look up here at the top of the screen. We have now a new chat scope, and with that, with one click, you are now into chat. Look how beautiful that is. Search to chat, just so seamless. So, you can really, you can just talk to it. You can just ask for it. So, in this case, let's say I'm going to ask for a gaming-optimized TV. All I have to say is, "Which of these are best for gaming?" And we remember all of the context. Since we know you're asking about gaming TVs, we pull out, "Oh, this one has a game optimizer," "This has game mode," and so we make that really helpful. I'm on a budget. I'll ask you to adjust it for, uh, which one of these is the cheapest here. I didn't know you could get a flat screen for under $500, but that's a good deal there on Bing.
If you're looking for a TV, Engadget elaborates a bit more about how the experience was. Basically, think of this layout as the physical manifestation of what Microsoft is calling your AI co-pilot. In here, you're encouraged to be way more conversational than you would be with say, Bing's regular search bar, or even a Google search. So, after you get your initial round of answers from Bing, you can follow up with questions without all every little bit of the keywords or context you provided earlier, and the system will still know what it is that you're talking about. In fact, it'll keep all the context until you hit that sweep or the broom icon to the left of the input field to start a new topic and clean the slate altogether.
So, Microsoft has also added AI into their Edge browser. You can, for example, pull up a PDF, ask questions about it, summarize it, and compare it to other stuff on the web. Just take a look, it's pretty mind-blowing. And you're going to notice now that we've integrated Bing in a really cool new way. Let me show you. I'm browsing around in my new Edge browser and I want to read Gap's quarterly report. And up comes the 15-page Gap PDF. It's pretty long, I won't have time to read all that. What I'd love is a summary of the key points. With one click, I can open up the sidebar. I can use chat and Edge to simply ask it to give me the key takeaways of the page I'm on. So, I'll just say, "Key takeaways from the page." And Bing, an AI, can now read that PDF. And look how great it comes up with the summary of the key points here. Very, very cool. A massive time savings.
But now I want to compare this with say, Lululemon, who also has their third-quarter earnings. Bing can now call out to the web, pull information from outside of this page, bring it into Edge, compare it with the information that's on this page, all with an Edge. And I asked it to do it in a table. And look how amazing this is. Just like that, in one table, I can get an answer to this question. Think about how much time that would have taken otherwise. I really do have to say, that's great execution by Microsoft.
There's also a new compose tab where you can generate whatever content you'd like, specifying the tone, length, and other parameters. So, if you still couldn't see it with ChatGPT, there's no longer any doubt. The world has just changed. It's the summation of human knowledge squeezed into an AI, or at least the start of that process. Just stop and think about that. We're living through history.
So, what was Google's answer? Unfortunately for Google, everything got off to a horrendous start. Google's new highly touted AI chatbot, Bard, has already made a boo-boo. The very first advertisement for Google's Bard showcased it giving a wrong answer. After Fortune reported on the incident, Alphabet's share price began to slide. In the ad, Bard is given the prompt, "What new discoveries from the James Webb Space Telescope can I tell my nine-year-old about?" Bard responds with a number of answers, including one suggesting the JWST was used to take the very first pictures of a planet outside the Earth's solar system, or exoplanets. This is inaccurate. The error was spotted hours before Google hosted a launch event for Bard in Paris, where a Google senior executive touted Bard as the future of the company. Shares of Google parent Alphabet were down more than 7% in early trading Wednesday, outpacing declines in the broader S&P 500.
The event was very disappointing. Very little time was spent on the Bard conversational AI. A lot more time was spent on reiterating how good existing Google products were, like Search, Translate, Google Lens, and Maps. The elephant in the room was what Microsoft and OpenAI were doing. So, after 13 minutes talking about other things, they finally got onto their ChatGPT competitor, powered by their research language model, Lambda. The thing was, it was presented as a standalone product. What they showed was very similar to ChatGPT. There was no sourcing or further integration into any OS or any other kinds of features. Google is basically where OpenAI was last year.
The biggest deal for Bard is its ability to answer questions with no one right answer. Google calls this "Nora," and here's an example. But for many questions, there's no one right answer. What we call "Nora" queries, questions like, "What are the best constellations to look for when stargazing?" For questions like those, probably won't explore a diverse range of opinions or perspectives and be connected to the expansive wisdom of the web. That's why we bring in the magic of generative AI directly to your search results. So, soon, if you ask, "What are the best constellations to look for when stargazing?" new generative AI features will help us organize complex information and multiple viewpoints.
And then, of course, the infamous moment of the presentation. Presenter Liz Reed was about to demonstrate Multi-Search, a new Google Lens feature, and this is what happened.
"Or you spot a floral pattern shirt, but you want an embroidery instead. You can use Multi-Search for that too. Let's see how that works with a live demo."
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It was the most embarrassing incident in a tech presentation since Steve Jobs' Wi-Fi wouldn't connect back in 2010. "Our networks in here are always unpredictable, so they're a little, have no idea what we're going to find. They are slow today. You know, you could help me out if you're on Wi-Fi, if you could just get off. Appreciate it."
Aside from this, there wasn't much else, and then the presentation just moved on to Google Maps. Overall, the Google presenters seemed flat, and also the live stream's comments were turned off, very unusual for a Google event. So, the event didn't provide any groundbreaking information or much information at all, for that matter. It only signaled that Google probably isn't prepared and doesn't have a solid plan yet, or they would have showed it. In my opinion, they just shouldn't have done the event. As mentioned, $100 billion dollars of stock value was lost due to their poor performance. Of course, markets are volatile, and it's probably going to bounce back, but it is an indication of what investors immediately thought.
Google, no doubt, will probably regroup and figure something out. There just isn't really another choice for the company. Satya seems genuinely very calm, cool, and collected about the whole thing. The most profitable large software business is search. So, I look at this and say, "Look, I just have to earn one user at a time, an incremental GM." I've never ever felt this liberated in terms of opportunity in the days ahead. So, I'm very excited about innovating, meeting the needs, knowing that the search category is the most profitable and large category. Just on Windows, Google makes more money on Windows than all of Microsoft. So, that alone should sort of give us the impetus to really go after this.
There's a great interview by The Wall Street Journal where he behaves like he's just stumbled across a gold mine, and I don't blame him. We are grounded in the fact that, you know, Google dominates this space. I, I feel like a new race is starting with a complete new platform technology. I'm excited for the users to have choice finally, and a real competitive race out there.
"How are you thinking about monetizing this?" "The last time I checked, software, it was a search was the most profitable category, uh, there is on planet Earth. So, therefore, all I need is a few more users, uh, and someone else that I'm competing in has to keep all of their users and all of their gross margin. That's, I love, I'm looking forward to that."
"Our intent is to do that, which is to put stuff out there with safety, but at the same time realizing that we are going to have to think about safety as an ongoing responsibility, not a one-time responsibility."
"There's a lot of fear that AI is going to take our jobs, replace us. Is that unfounded? And how do you think about tools like Bing now, and how we use it in the job market?" "Like, I, I think of this as at the foundational level, going to help us do our jobs better, reduce some of the drudgery in some of our jobs, whether it's in coding or in writing or in automating workflow or searching for information. So, at the fundamental level, I think we need a productivity boost. I feel it'll create more jobs. The barriers to knowledge work will come down. So, I mean, the unintended consequences around labor market shifts are always something we need to be mindful of, but I don't subscribe to this zero-sum or one lump of labor fallacy, and I think that we're going to have new jobs get created and more job opportunities."
"What about this guy? Does Clippy haunt your dreams?" "Not really. It's probably the thing that was the most fun character Microsoft introduced, which, you know, think about it, right? We have been on a 30-year journey to perfect it. So, I'm excited to be here in 2023 launching Bing with AI."
So, one of the key things in the story is that Microsoft has little to lose, but Google has everything to lose. Satya told the Financial Times that search has changed forever, and Google has to defend their entire market share. So, what about the wider discussion? What about the jobs that will be replaced? Website content makers may fret. AI may have taken a lot from their businesses. It will also be interesting to see how publishers and content owners react to this. The chat answers are more advanced than the simple query answers that we see in search engines today, and it's clear that people will click on links less. Even if Bing is clearly sourcing information here, there's about a billion questions that can be raised from this moment in history. Will there be lawsuits from news sites over using their content? What about political bias and censorship? What about all the unintended consequences? Time will only tell. I can only hope that the benefits outweigh the risks.
And on the bright side, it's obvious to see that there is a large benefit here. I think the next wave to excite everyone would be an audio version of this, a smart AI assistant that has actually good voice synthesis. That's the next step. I actually briefly mentioned this idea a few weeks ago on the Through the Web podcast, so check it out if you haven't already.
So, in conclusion, as I said in the last video, even just a year or two ago, nobody would have thought that Google would be in this position. From their presentation, it looked like they were unprepared, and they weren't integrating Bard as well as ChatGPT was being used, but that's just me. What do you guys think? Anyway, so that's an update to the beginning of the AI War. I'll be interested to know your thoughts. Anyway, thanks for watching. If you did like this episode, got a whole bunch of stuff on AI. Maybe if you're wondering how this all started and who invented AI, I've got a video on that. If not, there's a bunch of other stuff on here too, on science, business, and technology. It's the open. Watching Cold Fusion. My name is The Gogo, and I'll play you out with yet another new track I made on the second channel. Cheers guys, have a good one.
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