Newsletter
Google and OpenAI are in a big AI (Artificial Intelligence) boxing match that most people don’t really know about. AI is a new frontier in tech, and a ton of companies are striving to carve out the largest chunk of the market. However, the story surrounding Google and OpenAI is the juiciest, and the former could be winning this AI fight. It’s something that we all pretty much expected, however.
What’s the cause of the fight?
Most people don’t know about Google’s business structure. The majority of people know Google as the search company. That’s true, but its search business is, among other things, a vessel to convey advertisements. Selling online ads is the mass majority of Google’s income. To put this into perspective, 80% of Google’s global revenue in 2021 was through ads.
71% of its advertisement revenue came from advertisements on the search results page. Altogether, search result ads made up about 56% of the company’s revenue that year.
Why is this important? Well, if people are using ChatGPT to search for solutions to their life’s problems, then they’re not using Google. This means that fewer people are using Google Search. Cause and effect, fewer people are going to be clicking on search result ads to earn Google ad revenue. This is toying around with a massive chunk of Google’s revenue.
But, Google is winning the AI fight with OpenAI
So, OpenAI was in the position to be an issue for Google. Now, Google wasn’t exactly going to be filing for bankruptcy or anything like that, but a situation like this could eat away at a company’s market share over the long run; sometimes, pernicious threats are the most dangerous. Since the unveiling of Google Bard, the fight has been on. Even with as powerful as ChatGPT is, however, Google might have this battle in the bag.
Google has an arsenal of products
ChatGPT is truly a marvelous chatbot, and it’s only going to get better, but the writing was on the wall even before OpenAI formed. Google has several hardware products, but it has a massive inventory of software products; it’s a software empire. We’re talking about Docs, Sheets, Slides, Gmail, Drive, YouTube, Chat, Calendar, Tasks, and Chrome just to name a fraction. We also can’t forget about Android, ChromeOS, and Fushia.
These are all applications, web apps, and operating systems that Google can integrate Bard into. People run businesses, go through school, create, and more using Google’s platforms. Bard and other Google AI products have real utility in so many more situations than ChatGPT.
OpenAI doesn’t have an ecosystem of applications and services. It can integrate ChatGPT with DALL-E, and there’s some utility there, but it’s nothing compared to Google. ChatGPT can generate a ton of content, but Bard can as well. Admittedly, Bard isn’t as good at creating content as ChatGPT, but the differences are negligible to people who aren’t directly comparing the two.
As Google injects its AI into more of its services, the need for ChatGPT will decrease. Do you need to type up an email to your clients? There’s no need to go to ChatGPT since Bard can export to Gmail. If you need to type up a short story, why go to ChatGPT if you can generate one right in Google Docs?
OpenAI has something, but…
The reason why there are so many AI chatbots on the market is that OpenAI lends its LLM (large language model) to other companies. Microsoft is the main company along with Snapchat, and a plethora of other services. So, ChatGPT exists in many forms on the internet.
However, a lot of the companies using ChatGPT are very small in size. They just don’t have the user base that Google has.
OpenAI is dealing with some financial issues
Aside from its competition from Google, OpenAI has other issues on its plate. As of the time of writing this article, OpenAI is staring bankruptcy in the face. We’re not sure that the company will go bankrupt, but it’s still not a position that the company wants to be in.
OpenAI might not have the kind of income to deal with running ChatGPT. The company licenses its chatbot to other companies, it has the $20/month ChatGPT+ subscription, and it gets money from investors. However, that doesn’t seem to be enough. Also, OpenAI doesn’t run ads on its services.
We don’t know how many companies are implementing ChatGPT or how many people are on ChatGPT+, but it doesn’t seem like the numbers are great. OpenAI pays a ton of money to keep ChatGPT running, and that’s about $700,00 a day. This should come as no shock, as running major platforms such as ChatGPT costs a ton of money. This doesn’t even factor in running DALL-E.
Since OpenAI is having so much trouble just keeping these two services afloat, there’s not much hope that the company will be able to expand much further without securing more funding or making a rapid shift in its strategies.
Google, on the other hand, has many more funds available to expand its AI ventures. The company does have investors, but it’s not as dependent on them as OpenAI is.
Maybe OpenAI could get a second wind through Microsoft
So, as is, OpenAI will have some trouble holding its own against Google. However, what if the company had some help? If, by any chance, Microsoft purchases OpenAI (which doesn’t seem too farfetched), then there’s a chance that the company could have a second wind.
Microsoft has the Microsoft Office suite that rivals Google Workspace. ChatGPT could be integrated into Office and other Microsoft platforms. With Microsoft’s backing, OpenAI could reach new heights and probably push AI even further. However, right now, it has its limitations.
For the time being, it seems that Google has won this little battle against OpenAI. While there wasn’t an obvious battle going on between them, those of us in the tech world could see it. Now, we’re all waiting to see who the next competitor in the AI fight is going to be.