The AI race is on among Big Tech players
- March 1, 2023: Vol. 10, Number 3

The AI race is on among Big Tech players

by McAlinden Research Partners

Tech giants are racing to throw their hats into the mix of new artificial intelligence chatbots that will vie to compete with OpenAI’s highly successful ChatGPT program, now the fastest application to ever reach 100 million monthly users. Following Microsoft’s multibillion-dollar investment in OpenAI in January, and a potentially imminent expansion of its implementation in Microsoft’s products, Google and Baidu each announced the rollout of their own AI bots.

Google and Baidu’s primary concerns regarding Microsoft’s access to ChatGPT are likely related to how it could disrupt the traditional search engine, a key component of each company’s business. Speculation is swirling that Microsoft may be on the verge of integrating ChatGPT with its Bing search engine, which will need to be countered by its competitors as soon as possible.

Interest in AI applications has been booming since it was revealed that Microsoft was preparing a massive investment to secure its stake in consumer and enterprise-scale generative AI tech. Generative AI is primarily used to produce unique images, text and other mediums of communication from human prompts.

OpenAI, the organization behind the popular AI tools ChatGPT and DALL-E, may now be worth as much as $29 billion following a new round of fundraising from Microsoft and multiple other partners. That would be more than double the $14 billion valuation the company received from a 2021 tender offer. Though a conclusive dollar figure was not given, Crunchbase News notes that Microsoft signed off on a “multiyear, multibillion-dollar investment” in OpenAI at the end of January, which compounds the $1 billion in funding it has already received from Microsoft. Previous reports suggest Microsoft was in discussions to invest as much as $10 billion as part of the offer, alongside venture firms Thrive Capital and Founders Fund.

Google countered Microsoft’s foray into third-party AI tech by quietly investing around $300 million in startup Anthropic. Per reporting by Financial Times, Google’s investment purchased a 10 percent stake in the company and established Google Cloud as Anthropic’s “preferred cloud provider.” AI models need access to massive troves of data for training and development and both Anthropic and OpenAI are likely feeding on whatever computing capacity Google and Microsoft have to offer.

OpenAI’s DALL-E and its successor, DALL-E 2, create original, realistic images and art from a text description that is input by a human user. It can also make realistic edits to existing images, adding new elements to a pre-existing image or removing elements, while taking shadows, reflections and textures into account.

ChatGPT, meanwhile, is an AI model that interacts with humans in a conversational way but is also capable of producing long-form content such as letters and essays. Media outlet Buzzfeed saw its stock price quadruple over the course of just three days in January after announcing they would rely on ChatGPT and OpenAI to help enhance their quizzes and personalize some content for its audiences. The current iteration of OpenAI autoregressive language model, GPT-3, was trained on a 570GB trove of data obtained from books, webtexts, Wikipedia, articles and other pieces of writing on the internet, equivalent to 300 billion words. That gives the model 175 billion parameters, a connection chosen by the language model and learned during training. A parameter count can be considered to be the count of connections between nodes in a neural network.

ChatGPT is the primary product that Google, Baidu, and others are primarily focused on competing with for now. Both have explicitly announced their new AI projects will include chatbots with similar capabilities to ChatGPT. Google said its bot, Bard, was already up and running for “trusted testers” and will be available to the public “in the coming weeks”. As CNN notes, Google unveiled its Language Model for Dialogue Applications (or LaMDA) some two years ago and said this technology will power Bard.

Baidu’s announcement was very similar to Google’s and highlighted its own chatbot launch, named Wenxin Yiyan” in Chinese or “ERNIE Bot” (Enhanced Representation through Knowledge Integration) in English. The service will launch in March, a spokesperson told CNN. Baidu also hinted at a “text-to-image generation” program that might mirror OpenAI’s DALL-E 2. Though Alphabet stock was largely unchanged by Google’s AI announcement, Baidu shares soared by more than 13 percent to an 11-month high in Hong Kong.

GPT stands for Generative Pre-trained Transformer and, per OpenAI, the dialogue format makes it possible for ChatGPT to “answer follow-up questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests”. More than 1 million users signed up for ChatGPT’s free research preview in the first week of operation, following a Nov. 30 launch. That userbase ballooned to 100 million monthly active users in January, making it the fastest-growing consumer application in history, according to a UBS study. For context, Engadget notes it took social media sensation TikTok nine months to reach 100 million monthly users after its debut.

To monetize their rapidly growing popularity, OpenAI recently announced the launch of ChatGPT Plus, a $20 monthly plan that gives you priority access to the AI chatbot, even during peak time where free users would have to wait. According to The Verge, the plan will give “faster response times” and “priority access to new features and improvements.” Per DemandSage, $200 million in revenue is expected to be generated by OpenAI through the end of this year. The company further predicts OpenAI will be able to generate revenue of $1 billion by the end of 2024.

The urgency and timing behind Google and Baidu’s announcements may reflect concerns regarding disruption to their traditional search engine businesses. If users can query an AI bot like ChatGPT, which will then curate a detailed and concise response based on data and parameters in its network, it could save users a significant amount of time and become a preferable option to traditional searching. Moreover, users could potentially interface with the bot and ask more in-depth questions based on its responses, stringing together a cohesive dialogue, as opposed to scrolling and refining multiple disconnected queries to find answers.

Google CEO Sundar Pichai said the company plans to add AI features to its search engine that synthesize material for complex queries, such as if learning guitar or piano is easier. Microsoft has yet to provide details on a possible integration of ChatGPT and Bing, but information about a new search experience appeared to leak, according to Cnet. Images and details posted on social media documented a new interface, which may include a larger search box for chatting instead of for submitting search queries.

Microsoft’s Bing is ranked as the second most popular search engine behind Google, according to Reliablesoft, but that isn’t saying much when you consider Google maintains an almost 93 percent share of the market to Bing’s roughly 3 percent to 12 percent. Baidu comes in at third place behind Bing, not trailing by much, but surely not wanting to fall any farther behind.

This article was reported and written by McAlinden Research Partners, which can be assessed here.

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