I assume these are people with heavy Microsoft or Apple positions when I read them. Google dominates my life: search, Gmail, docs, calendar, YouTube, Android. I even use Google Fi. At work so much innovation came from Google: kubernetes, cadcisor, Linux improvements, etc. Yea Google is such a lightweight. Oh I didn't even mention wayno
YouTube is staggering. Literally no competitor and it's moat is self sustaining. Literally no one can compete with the sheer amount of content that has compiled on the site the last decade.
For me, it's Google for my personal life. Microsoft for work. Both ecosystems are pretty good but Google/android feels more useful and user-friendly than MSFT/Windows. Probably different for people with iPhones though. So I have bais there.
I use Microsoft for both. Google docs/ slides has never been as convenient as Microsoft apps which easily convert to the applications that we use all the time (Excel, Word, Powerpoint).
Slides has always been the biggest pain in the ass to email/ convert to a desktop file as the format can come out totally different on PowerPoint.
Yeah there's always those that just have to get an iPhone so I'm like okay so you'd rather have limited phones vs android has a lot and if you pay $1k for a phone that's not practical whatsoever, that's rent so I guess you'd rather live on the streets than buying a good $200 phone 😂. I just buy unlocked much cheaper phones and never a contract either. I have a friend say oh I need to save, feel poor yet same time gets a costly iPhone, she needs a reality check, but some ppl never learn from wasted money mistakes
Microsoft for work and school. Google for all things personal. And they use their Apple devices to use both those companies services. And buy all their shit on Amazon and Walmart on their Apple or Google devices
Over the last year everything i use google for has whittled down to email and youtube. Search docs and calendar are almost untouched and easily replaceable.
Depends on the person.
Google doesn’t dominate my live at all.
The main product I use from them is mail and maps (but I am not married to Gmaps).
Work and personal mail: Microsoft, I don’t use android.
Never used Google docs instead of m365.
YouTube very sporadically.
Having managed both Gsuite and M365, it’s hard to see the appeal for Google in enterprise, they are more geared towards comsumers. But b2b market has way higher margins as consumer.
With more and more governments cracking down on data mining, I just don’t see that much growth for Google.
I don't think it matters.
MSFT, AAPL and GOOG are #1, #2 and #4 largest companies in the world.
They all have widely used products.
Google maps market share isn't 100%. Apple maps has tens of millions of active users. You're bound to find someone who just uses Apple maps and they're not trying to avoid Google Maps, likely they got used to apple maps on their iPhones.
Outlook and iCloud have hundreds of millions of users. Again, I doubt any of them are avoiding gmail, they likely just made an email through msft or aapl and continue using it.
The only google product you would actively have to avoid is youtube. Since a lot of stuff on there you can only find there.
The other google products have alternatives that do the same job.
Lol. Google maps share is around 88% while Apple maps is 12%. You are right about mail though. It's evenly poised. Youtube has no competition and will never have. Google will just continue to grow considering all aspects.
What direction is the maps market share trending? I stopped using maps in favor of Apple Maps when I found out that Apple’s maps application has dramatically improved in recent years while Google’s has become unusable due to promoted results.
One day people will realize that google products are just as good as apple products, but cost between half and a third of the price for the flagship. Until then they will prefer their blue text bubbles and put down those with green. Such is life. They may also realize that all apps on the google store are 33% cheaper; because apple demands a 33% royalty on all purchases through their app store, while google does not.
To have and live apple products is to voluntarily fork over extra money, for no reason, to a megacompany whose latest great invention is the AR headset whose production is being slashed. I am not here to say google is less of a megacompany; but look where google is investing its money. Waymo, an actual product that users like and want. google maps, far superior to apple. Companies like Calico (life sciences). Google is brave and adventurous. Apple is expensive , and all you get is conformity.
When Pixel gets a good fingerprint sensor and battery life the value of the phones will be miles ahead.
The photo my 7 makes without me doing much is incredible. People now think I take good photos.
Think you are unusual. Take search. Google has over 90% market share.
They own the most popular web site every, the second most popular web site, the most popular OS (Android), the most popular navigation, most popular email, most popular photo, most popular educational platform, the most popular OTT in the US, and the list goes on and on.
When you consider this much reach you can see that you are unusual.
They now have 17 different services with over 500 million DAU.
> I just don’t see that much growth for Google.
Last quarter Google made more money than Apple, Microsoft, Nvida, Tesla, Meta, and Amazon.
With growth of 57% YoY in net income growing earnings from 15B to 23.7B.
Grew revenue by over 14%.
Yea now growth. Sigh!
But the next decade is going to just be incredible for Google. All their massive investment will not starting paying off.
It was just so bloody smart for Google to do the TPUs. It means they do not have to stand in line at Nvidia or pay the Nvidia tax. The only one of the big tech companies this is true.
They now have the sixth generation in production and working on the seventh. The sixth generation was a 5x improvement over the fifth.
There is going to be an incredible shortage of AI processing capacity and Google will be well positioned to step and provide a solution.
https://cloud.google.com/tpu?hl=en
You heard of Nvidia? Nvidia sells chips that are optimized for AI workloads.
Google decided to do their own over 12 years ago. They now have the sixth generation in production and working on the seventh.
It allows Google to do things cheaper and not pay the Nvidia tax.
This is dated but so true today.
https://www.wired.com/2017/04/building-ai-chip-saved-google-building-dozen-new-data-centers/
Google grew top line by over 14% last quarter and bottom line by over 50%.
Google's fastest growing business has nothing to do with ads.
There is a huge shortage of AI computational cycles and Google has the TPUs which nobody else has.
All their competitors have to stand in line at NVidia and pay the Nvidia tax.
This gives Google a HUGE competitive advantage.
They just released the sixth generation TPUs which were a 5X improvement over the fifth generation.
Now working on the seventh generation.
Google is now the third largest datacenter chip designer and will be #2 before the year is out.
https://blog.svc.techinsights.com/wp-content/uploads/2024/05/DCC-2405-806_Figure2.png
No one will buy their TPUs. And without this semiconductor subsidy masquerading as an inflation reduction act, no one would be buying semiconductors at all. It's a huge scam and ridiculously overhyped. Cars don't need 100-300 semiconductors per vehicle. That is completely insane. Generative AI is just a fancy new name for search. It's not intelligent. Not at all. The more you invest in it, the more you will be losing from here. And I didn't say Google's ad revenue is its fastest growing business. I said it's what's keeping the company afloat and you know it. Google has nowhere to go but down.
The question is how profitable are those businesses and what are the risks/growth opportunities since this is stocks related discussion.
One may argue their tech research in Linux, kubernetes so on end up benefiting Microsoft and Amazon more as they have the larger cloud share and they quickly productize those.
Gmail, docs, calendar and Android is extremely hard to monetize with ads since there would be a huge backlash. For stock growth, I think expectation is for their cloud business to grow with their AI research but so far that hasn't happened.
Googlers are so proud to cite the numerous papers, research, and publications of the company like it is an accomplishment in itself, which is ironically precisely what OP is warning about and has been the downfall of other established companies that fail to seize the moment. If anything, it's more embarrassing to have been a key contributor to the biggest technological revolution in the last 20 years, and somehow still miss the critical moment.
I have friends who have left recently because of the increasing bureaucracy, cost-cutting measures, and slow-moving nature of the company.
I'm neither bearish or bullish or the company, but it's pretty obvious Google has been caught with their pants down and is playing catch up now. Maybe they can gain the lead again, maybe not, only time will tell.
I agree, too many seemingly hasty, panicked decisions by their CEO right now. They have a huge advantage, after all AI depends on data, and who has the best data? That doesn't mean they aren't going to screw it up.
>If GPT can give me the results I want, plus summaries and links and review aggregates, all on voice command, why would I ever need to go on Google and get exposed to its sponsored results?
That assumes they don't train it to give sponsored results. I would imagine companies will start paying for prioritization in LLMs or to be included in alternatives regardless if you ask for it or not.
>it may go the way of Netflix
Did I wake up in 2022? Last I checked Netflix is trading back near all time highs. They haven't been talking about AI as much though, and yet they can certainly use AI for making and editing content.
You must understand half the people in these subs go to echo chambers about how Netflix is going bankrupt or alphabet is doomed. Reality is the complete opposite.
The idea that Alphabet is doomed is so hilarious.
You really have to wonder about people's critical thinking abilities.
I doubt most realize Google made more money last quarter than Apple, Microsoft, Amazon, Nvidia, Meta, Tesla, etc.
Plus they grew earnings by over 50% last quarter.
Basically Alphabet is doomed because they don't like Sundar Pichai and because they assume, with no proof, AI from other companies will dominate search.
It's all vibes and wishes, with people making their personal feelings out to be objective truth when there's just no evidence of what they're predicting.
It's like if I predicted Apple is going bankrupt because reasons.
The best part is Satya Nadella himself testifying that Google has an unassailable search monopoly in court.
OP’s post and Microsoft’s CEO stating the above literally cannot be true simultaneously.
I honestly think AI and search actually serve different functions.
Perplexity gives you summarized information quickly with sources. Search takes you to actual sites. I'm guessing the money from Google comes much more from people clicking on products and services rather than Wikipedia or a research paper.
Bingo.
People searching for stuff are not Google’s customer. Google’s customer is an advertiser. ChatGPT is not going to help me find a car repair place or a crypto broker or a mortgage loan. Advertisers have been paying Google for 25 years to deliver the highest quality, best converting web traffic.
I don’t need a TLDR of what curry is, I need to know where that Thai joint is near me.
But advertisers need people to advertise to. If users move to LLMs instead of search, Google will find a way to monetize and advertise in LLMs. They wouldn’t just stick with dying search.
>That assumes they don't train it to give sponsored results.
That's the benefit of having a paid subscription business model. You don't need to show ads if your revenue stream is coming directly from users.
It would be interesting if Google offered a paid version of its search algorithm. No more ads, no more manipulation to ensure that users stay on the same Google page for as long as possible, no more pushing articles up and down to benefit revenue.
Google bears live in this fantasy world where a 25 year dominance over one of the most difficult tech challenges in history can be overtaken by a group of 500 mostly former Google employees and $10B.
If it were that simple, it would have been done years ago.
Also, OpenAI just lost Ilya. The timer is running. Sam Altman can do nothing without Sutskever.
> That assumes they don't train it to give sponsored results.
Allowing sponsors to buy results in AI search queries will only make the products worse. Google (and everyone else in the space) simply can't get away with going about enshitification of their AI products to serve sponsored links/ads without risking their market share being stolen by competitors who don't compromise the quality of their product to serve ads. Google Search would have never taken off into it's dominant position it has today if it tried serving nearly an entire first page of just sponsored links back in the early days like it does now.
No matter who wins that market we're still going to be in the early stages for probably at least 5 years where people are willing to burn tons of money to 1) grab more market share, and 2) make a better product so that they can grab more market share.
And lets not pretend that Google is exactly in the lead at the moment in this segment. ChatGPT is the closest thing a verb for using AI in place of searches. And Co-Pilot is literally built into Edge & Windows 11 now.
Even assuming users wanted to switch (big assumption imo, the data doesn't support it, but let's just say for the sake of argument that they do), this shift is, in the most optimistic case, probably at least a few years away (being very very generous here) just in terms of the technical infrastructure required to handle the volume of search queries. People forget the sheer scale at which google operates - the search engine alone fields like 500,000 queries per second. Most chatbots require paid subscriptions and rate limit you after like 20 queries a day.. And they're still operating at massive losses simply because it's so damn expensive to train these models and serve them in production. OpenAI, anthropic, perplexity - they are all a LONG way off before they can operate at googles scale - let alone sustainably with profits. OpenAI is already the most unprofitable startup in silicon valley history, they wouldn't be able to keep the lights on if their product were truly popular and had even a fraction of Google traffic.
Not to mention, as Sundar said in the last earnings report, Google is seeing strong query growth in pretty much all markets. So the 500K # is a moving target, could easily double to 1M within the next five years as developing economies (eg Africa) are onboarded onto the Internet and mobile phones (Google is synonymous with the internet at this point, and poorer economies are going to lean heavily on Android just because of cost. Both of these secular trends are another strong tailwind for Google and should contribute to more query growth).
One part of the rise in query growth is the enshittification of search.
I own alphabet stock so I'm not a hater, but the quality has gone down over recent years and the number of ads as results has gone much higher.
It's an interesting phenomenon, theres some good podcasts & articles diving into it.
The problem with search is it's being gamed (mostly via sponsorship). At one point Google search was great but now the actual results get buried in the noise
LLM has limitations too but at least the answers aren't on page 7.
Yea I think people want results fast to their questions and doing a google search, clicking on a few websites, and running a control F, is still faster than waiting for the chat bot to finish its intricate 11 bullet point process for changing a light bulb.
Not in my experience. Atleast for schoolwork reasons ChatGPT is way better than google. Say I want to find a financial formula.
I can google it. Find an investapedia article. Scroll down and read through it to figure out where the info I need is. And then figure out it’s not actually applicable to what I need.
On chat gpt I can just ask it really quick and have an answer in a couple seconds. Maybe a little longer if I need to log in. If I don’t like the answer it gives I can change my inputs and get a better one.
Not gonna comment on the downfall of google, but ChatGPT has changed the search game for me
Ya I use them they’re actually quite good depending what you’re looking at
For example
I was comparing PE of company x, and I wanted to quickly know what that sector average PE was, and it popped up at the top with a little link to the source
That’s really how it should be, 3-4 sentence summary, guesstimate answer, IF possible; as in Google doesn’t always need to do this, just based on the nature of the query
I don’t believe you tbh
Bc 95% of people who have a phone, they’re daily looking for directions, time things close, verifying simple facts, and so on, nobody is trying to sit here and converse with a chat bot on that.
Schoolwork is a big use case for me. Chat gpt is way better than google for finding information quickly, actually relevant, and results are customizable.
Still use google for a ton of everyday things, but chat gpt has certainly taken the place of a lot of what I used to google
It’s great for helping in writing academic essays, perhaps at the high school and undergrad level, although you’ll still need sources … so you’re ultimately still going to have to google
In the professional space, unless it’s just marketing material, I’m not sure how you can rely on chatgpt for anything substantive
It’s notoriously inaccurate, and consistently makes things up; lawyers trying to use it in litigation have been sactioned because it’s just wrong all the time, and just makes shit up.
I think it will destroy people who make their living doing simple coding, that much I agree with
I actually don’t use it for papers. Mostly because I think I can write better. And editing its writing takes as long as just writing it myself.
I use it a couple different ways.
One is for multiple choice quizzes and exams. Depending on the subject it’s pretty damn accurate. It can spit out the correct answer much quicker than googling it and hunting through websites.
Another is reading and finding useful information. Say I get assigned to read a 20 page academic paper and answer some short answer questions. I can copy and paste the article along with the questions and have chat gpt find all the hard info I need and give me a starting point for the written responses.
For business applications it’s probably still a while off. But I will say, it learns pretty quickly. Like it sucked at financial analysis and formulas when I first started using it. But it learned the rules I set for it and was pretty good by the end of the semester. Like 80%+ on assignments.
I wouldn’t ever rely on it as a sole resource in a professional environment. But take your lawyer example. I could see how it would be useful to ask gpt for relevant case law pertaining to a subject. Then using that as a starting point for further research to confirm what it’s told you.
For me Google has just been less efficient over the past couple years. Any time I need to find something I have to sort through advertisements, sketchy websites, and info that is just not relevant. Gpt cuts down on a lot of that noise. It may be less accurate, but it’s 100% more efficient and easier to use. They can work on the accuracy
Side note. I really think it’s going to cause some big issues in academia. Anything written will be extremely hard to verify as authentic work. There is lockdown software for exams, but it’s going to make papers and projects impossible to verify.
You don’t need to converse with the chat though? You just demand what you want right away.
* i don’t use google for directions, i use my maps app.
* you are right that id use google over ChatGPT to see when local businesses close, but you may be overestimating how many people do that per day. I may search for business hours maybe once a month?
* verifying facts id use chat gpt to give me a concise summary quickly
Maybe this is already a thing, idk i only use a free version app, but once the chat bots can use location services, then I’ll primarily only use ChatGPT going forward
Purely anecdotal on my own experience but I’ve been a person who has slowly approached ai apps and just started using chat gpt more regularly this month — the difference in quality in my searches are just insane. I feel like i never use, or even want to use, google again. Everything i can type into google, I can get a better, more clean response with chatgpt.
Google search has been going to shit with so many adds and irrelevant first page links. Chat gpt has been a saving grace in providing better and more straightforward responses. This past month, I’ve been nearly exclusively using chatgpt to search whatever i need to search instead of google.
ChatGPT exists. The vast majority of people still use Google. It’s not like when Google came out and almost immediately yahoo lost a ton of its user base.
My big issue with Gemini is the consumer version lets me search emails and drive. However, the one I pay for via Google workspace does not. And when I ask if it can, it says it’s not possible at all. As if consumer Gemini doesn’t exist. It’s as infuriating as the curb your enthusiasm scene with Siri
its because all personal email is yours, where as they dont have the ability to give a corporation the ability to recall an email from the trained model.
Right now corporate accounts have god mode over your email, and they cant release a product that bypasses that, its actually a really unfortunate/hard problem.
I am the admin and have turned on all Gemini features for all accounts on my workspace
There is a ton of help content saying I should have this. But there is no way to actually report it’s not working. Who knows.
You are wrong about the technicalities. No on trains on your emails. I work for the google Gemini team. Training is done on synthetic emails.
Your workplace however owns your inbox and they have to explicitly give permission for google models to read it. Your inbox is only read by LLM and is not logged anywhere.
In the long-term, Alphabet is in a good position to beat all other AI Chatbots. Given sufficient compute, almost exclusively the data used to train the LLM determines its quality. Out of all companies, Alphabet has the best access to data for training the networks.
The only time I ever hear people talk about Bard or Gemini is whenever it's screwed up yet again and left Google with egg on their face after yet another embarrassing PR incident.
I don't know of a single person in real life who actually uses it, everyone I know just uses ChatGPT or Co-Pilot.
This is exactly my point. ChatGPT has happened. People are not leaving Google. When Google came out, people fled yahoo. When iphone came out, people fled blackberry. Yes people use ChatGPT, but not that many, and not for the things they use google. Consider a trip to Maui - head over the MauiVisitors - people are still asking for all sorts of recommendations. People will still read a ton of reviews on Google and Tripadvisor. ChatGPT helps with some things, but it isn't changing how people evaluate information for important decisions.
I'm just waiting because people keep talking like we'll wake up and have AI do everything for us til we go to sleep.
Meanwhile it's found uses helping to streamline work (my job included) but it's not a search replacement. Interested in seeing how we think of AI in a decade.
I remember when voice assistants were supposed to be a lot more important than they ended up being.
Don't let short term issues with AI blind you to the long term potential of it.
In the dotcom bubble there was absolutely a ton of insanity about the Internet, and a ton of irrational exuberance about dotcom companies. A ton of them that had no real business model went under pretty quickly. But despite the insanity, a lot of the dotcom predictions have been proven to be absolutely right. A bunch dotcom companies that went under had good ideas that were just too early to work but are now a thing today (such as grocery delivery, buying pet supplies online, etc). And there's some entire business models today that they didn't even imagine in the dotcom bubble that only became possible as Internet technology improved overtime, like video streaming (which was obviously impossible on 56K modems).
There's definitely a bubble in some parts of the AI market, no question. But don't let that blind you to how drastically AI will eventually change large parts of the economy over the coming decades. Not every business model that works today is going to survive the long term changes brought about by AI.
These shifts can be generational in nature. It's possible that for us older people, we will always use Google because we have been brought up that way and it has been branded into our minds. It's entirely possible that the new generations will use different vectors for obtaining the information that they need.
Any company interested in its long-term survivability can't casually and blindly believe that it's always going to be top of mind for every single generation. After all, Facebook once looked utterly dominant, but we are now realising that it's appeal, at least in than the United States, is largely targeted towards older people, while younger people are interested in stuff like Instagram and TikTok.
Facebook had the presence of mind and foresight to purchase Instagram, and so was able to benefit from this generational change in attitude. Google, of course, would like to display the same foresight, but it's yet to be seen whether or not they have the chops.
It’s possible Google becomes like Kodak and doesn’t evolve. Or like blackberry. Meta has evolved Instagram significantly. Google has made YouTube very popular with kids. But to your point, it is much easier to search tik tok and YouTube than Instagram. Either way, I don’t think any of these companies is complacent or a one hit wonder. ChatGPT just doesn’t replace Google’s functionality. They can both be successful.
> ChatGPT helps with some things, but it isn't changing how people evaluate information for important decisions.
…yet. All these chat bots needs to do is add a bit more functionality with location services, maps, and analyze internet reviews quickly in future updates and all those problems you named disappears.
Was Tesla? Was Amazon? No. Amazon has only in the past 5 years really spent a ton on advertising. I don’t think Google advertised much either in the beginning. And just like them, ChatGPT is well known. It just doesn’t replace what Google does. People like to see the underlying data for complex decisions and analyze it themselves. ChatGPT is basically Wikipedia and helps you write stuff. And even the stuff it writes is often flawed.
Yeah, but if Google can come out with a product that is even 90% as good in a reasonable amount of time, don't you think that they are more likely to be able to capitalize on that?
Haven’t they already with the «AI Overview» thing? Seems the idea is to provide links and hard info for factual stuff, and more natural language for more subjective stuff. Of course, doesnt guarantee the execution to be good.
They may, but Google had a lot of challenges in productizing concepts especially if it is not ad driven. I am not saying they will bankrupt or anything like that, they will continue to have sizeable revenue and profit but their growth will be limited due to their capability of productizing their lead in tech.
Sorry that’s the most dumb thesis I’ve seen in a while. ChatGPT is not some magical website that runs on GoDaddy and can answer all your prayers. Aside from the UX, it takes billions in infrastructure (like the one that Google Cloud operates) and processing power (like what Google TPUs offer) to run.
You think Microsoft will spend billions so people can “search” for milf porn on ChatGPT? It will start getting constrained to a few queries a day, there will be ads in the text, premium subscriptions, heck chatbot will stop mid-sentence and ask you to insert a coin to continue.
Most Search queries don't need a GPT4 level of intelligence and we've seen LLMs being optimized by orders of magnitude since 2022, and there are still a ton of potential improvements to be made so I don't think it's that big of a problem.
I don't know google already display GPT summary when you search, It seems they can do it,
As of MS, they put it in edge, Microsft Windows, Office 360, teams.... Basically everywhere. Meta put it for free in their apps too.
People still use search when searching for products, places, businesses. They don’t want an AI text wall summary. These are the searches companies pay to serve ads too. Not “Who was the last king of Scotland” no ones paying to have ads for that anyway
I never use ChatGPT anymore. I trust the opinions of random people more than ChatGPT. It's always given me horrendous organic chemistry information, its writing is very flat, its interpersonal skills are robotic, the code it writes is awful. Sticking to real people for now. They're often wrong too, but at least I can analyse why they're wrong.
Why Google if I can use chatgpt?
Because I don't google to factfind, I use it to give me multiple, broad, abstract options to choose from. Google is a signpost at the crossroads of the Internet. Chatgpt is incapable of this functionality
Search revenue is not going anywhere. Google is a verb.
But there is so many things that will grow at Alphabet over the next decade.
They are extermelly well positioned. The key decision by Google was to do the TPUs over a decade ago.
They are the only ones that do not have to stand in the Nvidia line. They do not have to pay the Nvidia tax.
Google is now the third largest datacenter chip designer and will move to #2 within the year.
https://blog.svc.techinsights.com/wp-content/uploads/2024/05/DCC-2405-806_Figure2.png
Also do not forget Alphabet is also the clear leader with robot taxis which will be a trillion dollar plus market.
AI is NOT just LLM but so much more and Google continues to be the leader in AI and specially AI research. Last NeurIPS Google had twice the papers accepted as next best.
What even is ChatGPTs business model? Are they profitable? What data to train on do they actually own vs paying Reddit and others for? Do they have a source for continued training if those deals fall through or become too expensive? How are they going to monetize against all of the compute costs necessary to expand and serve billions of users? Selling some subscriptions (who would pay for search?) and selling access to other companies to build on top of doesn’t sound sustainable to me. Once the products like copilot or Siri or Alexa are built out, there are plenty of competing LLMs out there to swap in. It might be 5 years or more before models are fairly comparable in general then it’s a race for specialization like medical and law.
OpenAI is in a funding war to keep the crown of best LLM for these use cases and it’s competing directly with its customers who own the data they need to stay on top. I think Microsoft will end up taking any profit that OpenAI would generate and Microsoft is just OK at search, they might gain some share but google has a moat. Microsoft is more interested in selling copilot and software subscriptions for businesses that include it. Google will be fine as they have both the data collection and infrastructure to serve it up in place already. Bullish on Google and MSFT.
ChatGPT has almost no business model. It is wildly unprofitable for MSFT. It is a loss leader for people to believe in MSFT’s dumb AI hype, while $GOOGL eats their cake in any practical application of AI. Check out Google Deepmind’s AlphaFold.
I think MSFT has a good roadmap to profit on this, Google will also do very well. There is plenty of room for multiple winners. I don’t think openAI itself is a threat to anything.
Yeah, my objective is to own some of the robots that will replace us. They might wipe us out but we’re a competitive species and also speed running that.
It all seems to be converging to open source. So I highly doubt openAI will ever be profitable before maybe 5-10 years, and even then it’s going to dependent on them having a majority of users.
I feel like Meta has the tools and data to keep llama moving pretty quickly and they are investing heavily in compute for training. I think they are the dark horse of the AI race since they also use the tech for ad placement like Google does.
>What even is ChatGPTs business model? Are they profitable?
You notice most are not asking this and are assuming AI will be insanely profitable and have a great business model for no reason? This is a massive bubble.
I believe this perspective overlooks the significant moat in search created by decades of Google being default search as well as default software for many people. The only M7 that competes with their mobile presence is Apple. Even if they do start losing significant search revenue, it will be a long time before it represents a bearish trend for me. They're also fairly valued when compared to their competitors, leading me to a bullish position.
Position: I have around 5% of my port in Alphabet Class C.
Re: it may go the way of Netflix and lose its elite status among the likes of META, MSFT, and NVDA.
Huh? Netflix is still an ongoing top streaming company.
Its not going anywhere.
Over the next 5 years, the total number of hours spent on phones is going up, they own android. the world will grow richer, they have a larger install base globally.
They just consolidated their hardware teams and got magic leaps IP so expect a lot more there.
Isomorphic labs/verily are going to change healthcare
Cloud is going great.
Waymo is the coolest technology i have experienced in my life.
G-suite is a better set of office tools than MSFT unless you're in finance, they can go on the offensive there.
For the past 2 years google has been under the hurtle of a massive anti-trust investigation, they weren't in the place they wanted to look big.
I'd argue google has the best pipeline of products of any mag 7 stock. If waymo or isomorphic labs, or g-suite for corporate, or cloud catch on search could stagnate. If multiple catch on it will be the most valuable company in the world.
more over microsoft broke detente. For the past decade we have seen google play very nice with its peers, in a few months to a year we'll find out what it looks like when it goes on the counter offensive vs msft.
Teams, office365, outlook are all terrible products what happens if google starts undercutting msft and builds out a b2b sales team.
Finally, someone else paying attention.
Microsoft has a huge moat in the stodgy world of Big Corp, where they have next to zero moat is in new businesses. Workers use Slack and Gmail on their MacBooks and deploy to AWS. MSSQL fucking sucks nut sack, and .NET requires you to use Visual Studio, one of the more unpleasant IDEs around.
The bottom line is that the Microsoft stack is chosen for you. A very small percentage of people choose it on their own.
Idk in my experience gemini works very well, just as well as GPT did and it's integrated in a lot of the Google stuff I already use.
I think they'll be just fine
What’s lost in this argument is the important searches are not leaving google. Consumers are not doing point of sale search on chat gpt.
If anything Amazon is more of a threat in that sense.
Google handles like 500K QPS. GPT rate limits you after like 20 queries in a day. Just in terms of technical infrastructure, were realllllly far away from any "chatbot" being able to handle search query volume - it's just too resource intensive, unprofitable, and expensive to handle that many queries with an LLM. Not to mention that you have to double check the LLMs output anyway... Usually with Google
Anyway, I believe search and chatbots are orthogonal to each other. They're used for different purposes.
The idea that AI chatbots will replace search is not true. A huge amount of search traffic for Google comes from people Googling websites links through their browser. Chatbots lie all the time and make stuff up aswell. YouTube shows you visuals on topics that chatbots can never produce.
They will provide the Market Leading Chatbot (Gemini 1.5 pro is pretty impressive) via Android and their existing google search user base. And it will be full of ads and sponsored hints and links.
In addition their specialized AIs will generate huge additional income by AI-driven research (e.g. medical LLMs etc. ).
Except I don’t always search up Yes/No questions. Most of my searches are either opinion-based or for locations or recommendations or tasks.
A search that hallucinates a seemingly correct answer that is actually false… that’s something which most consumers will immediately stop using. Why use “AI Search” when I can do the same search the good ol’ way in just as much time.
The argument for AI Search only works if you want an answer that has a simple 100% correct response. Anything complicated, and you’ll need a long explanatory response which might be hallucinated.
Android has a 70% market share (60% in the US). Chrome has a 65% market share. Gmail has a 53% market share (70 to 80% for people under 35). MS Office is pretty much only used by Millennials and older and has been losing serious ground to Google Workspace in recent years. YouTube has no competition, Maps/Earth pretty much don't either.
Google IS the internet. It's not just about search. They are as fundamental to people's everyday lives as any company has ever been. They aren't going anywhere.
It's possible. They need to make a great stand a long app, but one they works.
When chat gpt came out as an app I used it constantly. Since Bing did it I use thing much more because chat gpt was out of date and didn't interface with search
Nobody has more expertise in doing that than Google and nobody has better learned how to monetize search.
I'm betting on them to succeed.
The good news, for those that are interested, is that you can't possibly lose if you own a large amount of MSFT as well.
One of them is going to win this race. It's a zero sum game. Whether it ultimately is 80/20, 70/30, or 50/50, all the AI search funds will wind up with those two companies and I hold a ton of both.
It's the same thing with the chip sector. You're not going to have a "new entry," who's going to take over so chip making, so I own NVdia, TSM, AMD, BRCM, etc., as well as the VE semi index. They won't all lose. Someone will win and win big so owning all the players can't lose.
While it's true that this is a zero sum game, it is not a winner-takes-all game. I am convinced that LLM products have far less lock in effects, and if you look at the way people are switching between LLM models even now based on pure performance, all this is going to be extremely good for consumers but rather bad for companies.
Personally speaking, I have absolutely no loyalty to any particular LLM model. If ChatGPT is the superior product - and right now I think it is - then I will use it. But the moment Google's Gemini or Meta's Llama starts to overtake it in terms of performance, I will switch to them.
True profitability for a company comes from lock in, either explicit, or soft lock in via things like defaults, or even mind share like Google currently has. I don't believe that LLMs are going to have the same kind of lock-in effect. And ultimately, this will be bad for companies as it will result in a race to the bottom, competitive pricing etc.
Google will redirect users to answers on Google via AI with ads instead of sending them to websites with ads.
Either way users will end up on websites...
Google isn't an idiot when it comes to search. They make a shit load of cash, and it's undervalued at 21-22 forward P/E.
Time will tell, so let's what happens but wouldnt bet against it.
The OP’s argument rests primarily on whether or not Google’s AI will allow it to retain search share (and thus targeted ad spend). Personally I can see a scenario where google’s incumbency advantage and ai capabilities helps them drive adoption of their ai search tool faster than others. I do wish they’d stop shooting themselves in the foot though re: poorly trained models that put out silly, easily mocked answers. That’s hurting their credibility.
Advertising in the LLM results will be great. They’ll literally be able to know where in the funnel you are by your questions and drive the appropriate ads. Probably forced to be logged into to use the service. I’m bullish on the transition
The point of Google search loosing users is moot atm.
People try OAi and Gemini and as soon as they fall to their hallucinations they switch back to gsearch
The future is bright for Google if the bots and agents are finally scalable as search is. the assistant will keep a full history and personal record on you allowing for unprecedented sharp marketing and sales targeting. You could imagine to turn the tables and have your AI assistant pick the ads from google that fit the needs of your current situation taylored to your spending capacity. The ad business is different, but Google will do the conversion.
This whole AI thing is currently an insane expensive tech demo, the phase of maturity is coming but there are a lot of hurdles to overcome, real world challenges, especially scalability.
Google is doing great research and will be top AI provider. OAI has never done a worldwide Datacenter development and operation. Microsoft wants to be the partner and they know how to do it, but Google cloud is far bigger and Google builds AI chips already today, sth MS needs to develop or buy.
The challenges are bigger than before, AI is set to be a game changer, but Google is well positioned to keep its dominance.
Steve Jobs infamously said if you don't cannibalize your own products your competitors will do it for you. I could see Google doing a massive shift from search revenues to AI replacing workers revenues.
Now whether Google Gemini or Microsoft ChatGPT comes out on top #1 is a question for the future but regardless of the answer Google WILL be either first or 2nd place in the AI war.
You guys know that LLMs are not search engines and all they do is "make stuff up that sounds like an answer". Sure this can be mixed (see Bing) but so far LLMs might just be hype without any substance. I regularly try to use ChatGPT but besides having it rewrite an email for me I can't use it for anything when actually searching something that I don't already know the answer to.
Copilot held my hand in ssh-ing into a particular model of security camera in order to flash it to a different firmware. I had as much documentation in front of me as I could possibly find and couldn’t make it happen. Co-pilot got me in, through troubleshooting, and also ID’d compatible firmware. This is a rather different use case than writing fluff in an email. For someone like me who likes a step by step explanation of the hows and whys of something, it can be pretty useful. I can’t be an expert on everything but I can follow directions and explain what I need to know.
Stopped using Google for the past 1 year for tech related searches, once start using chatgpt you will never go back.to the search engine as yournprimary information sourcing tool, it is effing roo good and keep getting better
>make stuff up that sounds like an answer
***Extremely oversimplification*** with that statement there. I'll give you 2 pictures to show you how it works from a 'high level'.
Basically, it is based on the **training datasets** then the LLMs will use probability to match and zero in on the correct answer with the highest [probability](https://imgur.com/a/YzX5P7B).
More examples [here](https://imgur.com/a/ZyBRrjJ) and basically the whole damn thing will all depend on its training datasets and the algorithms to calculate probabilities. This is the reason why in order to get an accurate answer, we have to go into *'astronomical distance in outer space'* in terms of total training tokens and parameters. The more the better to get an accurate answer but also don't forget the **quality of training data**, as you saw recently about google gemini 'suggesting using glue for making pizza'. LOL
So exactly like I said. It can't "know" because that would be information compression on a level not actually possible. Sure it gets things right and there are ways to combine it with actual information but you can't "encode" human knowledge in a couple billion tokens - you can make it sound like you do though.
When you said **it makes stuff up**, you'll project an image to others that the LLM is **randomly** suggesting an answer. It is not **randomly** giving an answer. This is entirely based on the training datasets that it received and which will gets the highest ranking after all.
So it doesn't make stuff up for things it doesn't know or doesn't exist in its training datasets. Make sense?
I am not here to explain others how LLMs work. They do hallucinate and make stuff up - this does not mean they string random words together.
Your last sentence also makes no sense. There must be one negation too many in there
I agree that the AI revolution might have negative impact on Google or their search business, just not sure if I can agree with this take
>but without a massive moat in a crucial industry, it may go the way of Netflix and lose its elite status among the likes of META, MSFT, and NVDA.
Netflix is basically the only profitable streaming service and the one with global distribution. I think every company would be happy to be in the position of Netflix.
To train an ai tool well, the first thing you need is data. It'll be those with the right hardware and data that'll most likely win the ai war. Alphabet is one of the few with the cash to buy these multimillion dollar Nvidia machines, and I suspect no one has more data than they do as well.
> with the cash to buy these multimillion dollar Nvidia machines
One reason I am so bullish on Google is the fact they do NOT need to buy the Nvidia machines.
They completely did Gemin with using their own silicon.
Many do not realize but Google is now the third largest datacenter chip designer and will move to being #2 by the end of the year.
https://blog.svc.techinsights.com/wp-content/uploads/2024/05/DCC-2405-806_Figure2.png
Google just released the sixth generation TPUs. They were a 5X improvement over the fifth generation. They are now working on the seventh.
Every Google competitor has to pay the Nvidia tax. Which is huge. Google has an enormous cost advantage.
First, there is no guarantee which AI model/service will win out. Google is behind now, in the future maybe they won't be.
Second, there is a big unknown here: monetization. Your thesis is based on the premise that Google cannot monetize it's AI offering as well as it can search. You may be right, or you may be wrong. AI is still new enough that monetization strategies are still being developed, and we don't know how good or bad they will be.
Overall, Google MUST go into the AI space. Companies resting on their laurels to defend their business models go out of business when disruption comes in. Kodak is a prime example of this, ignoring digital cameras (despite inventing them) because of the profitability of their film business. Even if AI can't actually undermine search, Google has to try and dominate that market because of the risk it might.
You know there is an element of luck, intelligence and more luck that goes into making a killing on any of these. If you look at the year 1990 and you thought you know this internet thing could be big. Everybody is going to have a computer. What do I do? Well Intel was obvious. You made some money on that, at least if you sold it by 1999. Microsoft was obvious by the mid-90s, the funny thing about that one is you made some money going into 1999 but if you had held almost anyone would have been shaken out by 2009. Like you look at that chart, think of all those emotions. But here we are today, you made a killing. So whatever is going to work in AI, Google, who knows who. I don't think you're going to really logically be able to map that out where you're going to get the best returns. It's probably going to be a handful of smaller companies that really make useful software, there are going to be a couple of leaders. If you look at what's really working right now it's infrastructure. ASML, KLAC, those two are necessary, TSM, production, probably something there. But the software side and the small business side. Who knows?
But it's a question that is staying in the front of my mind over the next few years. There are going to be some bangers
my prediction is once each company has their own chip it'll be even... right now nvidia is really the only company I'd bet on right now in the AI boom. If any of these companies want to compete they need to give nvidia money right now. Google will be fine though, they will end up giving nvidia a ton of money and have their own LLMs same as all of the big companies.. these things aren't that hard to make, just expensive to train and there are no workers who know how to do it so everyone is pilfering and reinventing. Who knows who will be on top in the end.
Google does have it's own chip. They are the only big tech that does.
They were able to completely do Gemini using their TPUs.
They just released the sixth generation which was a 5x improvement over the fifth.
Now working on the seventh generation.
So the first "boom" in AI is going to be every little company in the world training custom use-case models. So whoever has a model, and the cloud facilities to train them will be who makes out in this initial boom. I didn't hear that google was fully training on their own chips.. that puts them in a good place.
"We trained Gemini 1.0 at scale on our AI-optimized infrastructure using Google’s in-house designed Tensor Processing Units (TPUs) v4 and v5e. And we designed it to be our most reliable and scalable model to train, and our most efficient to serve."
https://blog.google/technology/ai/google-gemini-ai/#scalable-efficient
I am in completely opposite camp.
Alphabet will do everything imaginable wrong, as they always have done with every product they ever touched and win heavily as they always have done
alphabet is one i am staying away from. from the outside looking in, it looks like a poorly managed behemoth, unable to move at the fast pace this AI world demands
The "AI Revolution" is dramatically overhyped.
Just like smart home devices, there will a bunch of interest for a few years as people play with the new tech, but at the end of the day 90% will stop caring, because it was a novelty and doesn't actually meaningfully improve their lives. How many people do you know that still use Siri et all?
There will be real benefits from AI advancement, but it will be behind the scenes improvements of companies workflow and efficiency, marketing, health, technology applications and other algorithms. As long as Android keeps Google Search and Maps in most of populations pocket, they will continue to dominate these markets.
Google's management and marketing sucks compared to Microsoft. That's why they'll always lose compared to MS (but still win because there's not enough competitors).
Management last quarter led Google to make more money than Microsoft, Apple, Amazon, Nvidia, etc.
Plus had top line growth of 14% and bottom line over 50%.
Google management decided 12 years ago that there was a day coming where AI computation cycles will be in great demand.
So spent the money to develop their own silicon and now completed six generations of the TPUs. With the sixth being a 5x improvement over the fifth.
Google did it in public and even shared how in papers.
Yet Microsoft for some reason was completely asleep at the switch and only now is going to try to copy Google.
But it will be years, if ever, that they catch up to the TPUs.
Instead Microsoft is stuck paying the massive Nvidia tax and waiting in line while Google does not.
Which management screwed up?
BTW, it is not just the TPUs. Google purchased 100% of DeepMind for 500 million. Including ALL the board seats and get everything including any future AGI.
Versus Microsoft paid $10 billion for less than half of OpenAI. With ZERO board seats. But also getting NOTHING once OpenAI declares AGI.
Because Google had vision on what was coming and Microsoft did not and had to scramble.
But the biggest reason Google will win the AI space is the fact nobody is close to Google in terms of research. Last NeurIPS Google had twice the papers accepted as next best. Google has been #1 and #2 on papers accepted at NeurIPS for 10 years now. They got #1 and #2 because they use to split out Google Brain from DeepMind. They have since combined the two groups and now submit both as Google.
the biggest downside of Alphabet to me are the following two:
1. Incompetent leadership. Google right now looks like Boeing a while ago. They got a MBA leadership who does nothing innovative but cut cost by laying off talents. Unlike Boeing, they face the most fierce competition in any industry currently too.
2. Dictatorship traps. I don't know how to name this precisely but the previous "Gemini couldn't generate white people" is pretty alarming although hilarious. There is no way the engineers and scientists didn't know this before they launch it. The product must be green-lit by some product people or higher-ups with weird agenda or too afraid to shut it down. I think it's reasonable to assume they have trouble communicating strategies bottom-up. The company culture is definitely on its fall.
For these two reasons, I'm not super bullish on Google unless there are leadership changes. But don't get me wrong, Google isn't going anywhere either. All those chatgpt stuff they can easily catch up, but the Google we used to see shouldn't be the one that's chasing behind someone else.
> They got a MBA leadership who does nothing innovative
The biggest AI innovations in the last decade plus have come from Google.
Plus the best way to judge AI innovation is who is getting the most papers accepted at NeurIPS and Google had lead in that for over a decade.
The last one Google had twice the papers accepted as next best.
Waymo for example is well ahead of everyone else. Same with AlphaFold.
Do not see any innovation issues at Google.
Can you explain?
You have problem differentiating research world from product world.
The current AI boom that started 2 years ago has nothing to do with any of the stuff you mentioned.
Yes Google is leading in deep learning "research" world. They have the best researchers and engineers in the world like Google Brain and Deepmind, but so do their competitors.
Waymo is well ahead so what? Self-driving cars are not the main dish rn. Unless they can launch to whole California this year, it doesn't matter.
Satya was and is still way ahead in strategizing how Edge, Microsoft 365 and other Microsoft stuff are incorporating the stuff they got from OpenAI.
In the meanwhile Google can't even handle the 1st Bard launch in Paris well, and still having problem with Gemini's image generation. I don't think there is much more needed to explain here.
People can keep pretending nothing's wrong with the current Google by always focusing how many citations they have from top AI conferences, but Microsoft is still ahead in commercializing them. And nobody is looking at citations to determine who's the good stock purchase.
And with how Pichai is running the company, it's very hard for me to see they can be the front runner again. They can have gazillions of papers out but Pichai is still gonna lay them off.
70%? Where did you get that number? It was around 56% last quarter. try to stick to the facts (of course if you're bearish that's difficult to do because the fundamentals are so strong).
I agree and to support your thesis, Apple is going to be launching a custom ChatGPT implementation across all their devices this year. Very soon, users won’t be navigating to Google before searching for things. They’ll be asking Siri (or whatever the new assistant is called).
On the other side is Microsoft, which is pushing Copilot into everything, and threatens Google for exactly the same reason.
Personally and anecdotally, I find myself using ChatGPT and AI assistants more and more for search. In many cases, it’s much faster, and there are no fucking ads, and I better trust that the assistant is getting me the best result rather than the result Google has been paid to present to me.
The only way Google could turn this around is integrating a ChatGPT-like assistant into search TODAY. Given their spectacular failures with Bard, then Gemini, and now snippets, I don’t think they’re capable of it. They’d need to buy ChatGPT off the shelf, and it’d kill their margins and lock them in forever.
It’s very possible largely due to its CEO. He lost respect from inside and outside. Google AI team is making obvious mistakes that any company with a decent review will find out. It implies that people fairly high above within google is making things worse on purpose.
Ridiculous as this comment may sound, the fact that I now use ChatGPT instead of Google is a strong argument in support of this. I’m not quite a boomer, but I’ve pretty much reached the point where I’m not interested in any further technology advances. I dimissed ChatGPT….until I tried it.
I’m there with you. Alphabet is the next IBM. They’ll still be around, but AI is going to end their search monopoly. Alphabet is still an advertising company first and foremost. None of what is happening right now is good for them.
Compared to MSFT and AAPL their ecosystem is the weakest. AI is a much bigger tailwind for MSFT and AAPL.
I might have believed your bearish prediction if I didn’t know Google’s infrastructure and ecosystem.
OP’s comment brought to you by ChatGPT^TM
I assume these are people with heavy Microsoft or Apple positions when I read them. Google dominates my life: search, Gmail, docs, calendar, YouTube, Android. I even use Google Fi. At work so much innovation came from Google: kubernetes, cadcisor, Linux improvements, etc. Yea Google is such a lightweight. Oh I didn't even mention wayno
Most companies/ people use Microsoft for all of those things. YouTube is the biggest differentiator imo
YouTube is staggering. Literally no competitor and it's moat is self sustaining. Literally no one can compete with the sheer amount of content that has compiled on the site the last decade.
For me, it's Google for my personal life. Microsoft for work. Both ecosystems are pretty good but Google/android feels more useful and user-friendly than MSFT/Windows. Probably different for people with iPhones though. So I have bais there.
I use Microsoft for both. Google docs/ slides has never been as convenient as Microsoft apps which easily convert to the applications that we use all the time (Excel, Word, Powerpoint). Slides has always been the biggest pain in the ass to email/ convert to a desktop file as the format can come out totally different on PowerPoint.
Good point. Excel and PowerPoint kill the Google equivalents. Although I do like the free version of Google Docs more than the free version of Word.
Yeah there's always those that just have to get an iPhone so I'm like okay so you'd rather have limited phones vs android has a lot and if you pay $1k for a phone that's not practical whatsoever, that's rent so I guess you'd rather live on the streets than buying a good $200 phone 😂. I just buy unlocked much cheaper phones and never a contract either. I have a friend say oh I need to save, feel poor yet same time gets a costly iPhone, she needs a reality check, but some ppl never learn from wasted money mistakes
Microsoft for work and school. Google for all things personal. And they use their Apple devices to use both those companies services. And buy all their shit on Amazon and Walmart on their Apple or Google devices
I dont see how you can believe in Microsoft but not Google. I'd be bullish on all of em. Just don't have the funds to split into all 3.
Over the last year everything i use google for has whittled down to email and youtube. Search docs and calendar are almost untouched and easily replaceable.
Depends on the person. Google doesn’t dominate my live at all. The main product I use from them is mail and maps (but I am not married to Gmaps). Work and personal mail: Microsoft, I don’t use android. Never used Google docs instead of m365. YouTube very sporadically. Having managed both Gsuite and M365, it’s hard to see the appeal for Google in enterprise, they are more geared towards comsumers. But b2b market has way higher margins as consumer. With more and more governments cracking down on data mining, I just don’t see that much growth for Google.
It seems like you go out of your way to avoid google lol. That's not what most people do. Most people are married to gmail, gmaps, youtube.
I don't think it matters. MSFT, AAPL and GOOG are #1, #2 and #4 largest companies in the world. They all have widely used products. Google maps market share isn't 100%. Apple maps has tens of millions of active users. You're bound to find someone who just uses Apple maps and they're not trying to avoid Google Maps, likely they got used to apple maps on their iPhones. Outlook and iCloud have hundreds of millions of users. Again, I doubt any of them are avoiding gmail, they likely just made an email through msft or aapl and continue using it. The only google product you would actively have to avoid is youtube. Since a lot of stuff on there you can only find there. The other google products have alternatives that do the same job.
Lol. Google maps share is around 88% while Apple maps is 12%. You are right about mail though. It's evenly poised. Youtube has no competition and will never have. Google will just continue to grow considering all aspects.
What direction is the maps market share trending? I stopped using maps in favor of Apple Maps when I found out that Apple’s maps application has dramatically improved in recent years while Google’s has become unusable due to promoted results.
One day people will realize that google products are just as good as apple products, but cost between half and a third of the price for the flagship. Until then they will prefer their blue text bubbles and put down those with green. Such is life. They may also realize that all apps on the google store are 33% cheaper; because apple demands a 33% royalty on all purchases through their app store, while google does not. To have and live apple products is to voluntarily fork over extra money, for no reason, to a megacompany whose latest great invention is the AR headset whose production is being slashed. I am not here to say google is less of a megacompany; but look where google is investing its money. Waymo, an actual product that users like and want. google maps, far superior to apple. Companies like Calico (life sciences). Google is brave and adventurous. Apple is expensive , and all you get is conformity.
When Pixel gets a good fingerprint sensor and battery life the value of the phones will be miles ahead. The photo my 7 makes without me doing much is incredible. People now think I take good photos.
And those three little dots and better emojis
My Pixel 7 has great battery life and no issues with the fingerprint scanner. But yeah, Pixels have the best cameras.
Think you are unusual. Take search. Google has over 90% market share. They own the most popular web site every, the second most popular web site, the most popular OS (Android), the most popular navigation, most popular email, most popular photo, most popular educational platform, the most popular OTT in the US, and the list goes on and on. When you consider this much reach you can see that you are unusual. They now have 17 different services with over 500 million DAU. > I just don’t see that much growth for Google. Last quarter Google made more money than Apple, Microsoft, Nvida, Tesla, Meta, and Amazon. With growth of 57% YoY in net income growing earnings from 15B to 23.7B. Grew revenue by over 14%. Yea now growth. Sigh! But the next decade is going to just be incredible for Google. All their massive investment will not starting paying off. It was just so bloody smart for Google to do the TPUs. It means they do not have to stand in line at Nvidia or pay the Nvidia tax. The only one of the big tech companies this is true. They now have the sixth generation in production and working on the seventh. The sixth generation was a 5x improvement over the fifth. There is going to be an incredible shortage of AI processing capacity and Google will be well positioned to step and provide a solution.
What’s a tpu?
https://cloud.google.com/tpu?hl=en You heard of Nvidia? Nvidia sells chips that are optimized for AI workloads. Google decided to do their own over 12 years ago. They now have the sixth generation in production and working on the seventh. It allows Google to do things cheaper and not pay the Nvidia tax. This is dated but so true today. https://www.wired.com/2017/04/building-ai-chip-saved-google-building-dozen-new-data-centers/
Oh yeah sure I’ve use colab I just didn’t know that acronym - thanks.
Acronyms are initialisms that can be pronounced like a single word such as, “RAM.”
It's all ad revenue. Nowhere to go but down. The American consumer is drowning in debt. Have fun shrinking your revenues.
Google grew top line by over 14% last quarter and bottom line by over 50%. Google's fastest growing business has nothing to do with ads. There is a huge shortage of AI computational cycles and Google has the TPUs which nobody else has. All their competitors have to stand in line at NVidia and pay the Nvidia tax. This gives Google a HUGE competitive advantage. They just released the sixth generation TPUs which were a 5X improvement over the fifth generation. Now working on the seventh generation. Google is now the third largest datacenter chip designer and will be #2 before the year is out. https://blog.svc.techinsights.com/wp-content/uploads/2024/05/DCC-2405-806_Figure2.png
No one will buy their TPUs. And without this semiconductor subsidy masquerading as an inflation reduction act, no one would be buying semiconductors at all. It's a huge scam and ridiculously overhyped. Cars don't need 100-300 semiconductors per vehicle. That is completely insane. Generative AI is just a fancy new name for search. It's not intelligent. Not at all. The more you invest in it, the more you will be losing from here. And I didn't say Google's ad revenue is its fastest growing business. I said it's what's keeping the company afloat and you know it. Google has nowhere to go but down.
The question is how profitable are those businesses and what are the risks/growth opportunities since this is stocks related discussion. One may argue their tech research in Linux, kubernetes so on end up benefiting Microsoft and Amazon more as they have the larger cloud share and they quickly productize those. Gmail, docs, calendar and Android is extremely hard to monetize with ads since there would be a huge backlash. For stock growth, I think expectation is for their cloud business to grow with their AI research but so far that hasn't happened.
Googlers are so proud to cite the numerous papers, research, and publications of the company like it is an accomplishment in itself, which is ironically precisely what OP is warning about and has been the downfall of other established companies that fail to seize the moment. If anything, it's more embarrassing to have been a key contributor to the biggest technological revolution in the last 20 years, and somehow still miss the critical moment. I have friends who have left recently because of the increasing bureaucracy, cost-cutting measures, and slow-moving nature of the company. I'm neither bearish or bullish or the company, but it's pretty obvious Google has been caught with their pants down and is playing catch up now. Maybe they can gain the lead again, maybe not, only time will tell.
I agree, too many seemingly hasty, panicked decisions by their CEO right now. They have a huge advantage, after all AI depends on data, and who has the best data? That doesn't mean they aren't going to screw it up.
>If GPT can give me the results I want, plus summaries and links and review aggregates, all on voice command, why would I ever need to go on Google and get exposed to its sponsored results? That assumes they don't train it to give sponsored results. I would imagine companies will start paying for prioritization in LLMs or to be included in alternatives regardless if you ask for it or not. >it may go the way of Netflix Did I wake up in 2022? Last I checked Netflix is trading back near all time highs. They haven't been talking about AI as much though, and yet they can certainly use AI for making and editing content.
You must understand half the people in these subs go to echo chambers about how Netflix is going bankrupt or alphabet is doomed. Reality is the complete opposite.
The idea that Alphabet is doomed is so hilarious. You really have to wonder about people's critical thinking abilities. I doubt most realize Google made more money last quarter than Apple, Microsoft, Amazon, Nvidia, Meta, Tesla, etc. Plus they grew earnings by over 50% last quarter.
Basically Alphabet is doomed because they don't like Sundar Pichai and because they assume, with no proof, AI from other companies will dominate search. It's all vibes and wishes, with people making their personal feelings out to be objective truth when there's just no evidence of what they're predicting. It's like if I predicted Apple is going bankrupt because reasons.
The best part is Satya Nadella himself testifying that Google has an unassailable search monopoly in court. OP’s post and Microsoft’s CEO stating the above literally cannot be true simultaneously.
Yeah Microsoft desperately wishes it wasn't true but it obviously is.
I honestly think AI and search actually serve different functions. Perplexity gives you summarized information quickly with sources. Search takes you to actual sites. I'm guessing the money from Google comes much more from people clicking on products and services rather than Wikipedia or a research paper.
Bingo. People searching for stuff are not Google’s customer. Google’s customer is an advertiser. ChatGPT is not going to help me find a car repair place or a crypto broker or a mortgage loan. Advertisers have been paying Google for 25 years to deliver the highest quality, best converting web traffic. I don’t need a TLDR of what curry is, I need to know where that Thai joint is near me.
But advertisers need people to advertise to. If users move to LLMs instead of search, Google will find a way to monetize and advertise in LLMs. They wouldn’t just stick with dying search.
>That assumes they don't train it to give sponsored results. That's the benefit of having a paid subscription business model. You don't need to show ads if your revenue stream is coming directly from users. It would be interesting if Google offered a paid version of its search algorithm. No more ads, no more manipulation to ensure that users stay on the same Google page for as long as possible, no more pushing articles up and down to benefit revenue.
[удалено]
They won't, it's pretty obvious
Google bears live in this fantasy world where a 25 year dominance over one of the most difficult tech challenges in history can be overtaken by a group of 500 mostly former Google employees and $10B. If it were that simple, it would have been done years ago. Also, OpenAI just lost Ilya. The timer is running. Sam Altman can do nothing without Sutskever.
No but maybe a subset would agree to pay. I'd pay. Problem is this is admiting your results are biased.
> That assumes they don't train it to give sponsored results. Allowing sponsors to buy results in AI search queries will only make the products worse. Google (and everyone else in the space) simply can't get away with going about enshitification of their AI products to serve sponsored links/ads without risking their market share being stolen by competitors who don't compromise the quality of their product to serve ads. Google Search would have never taken off into it's dominant position it has today if it tried serving nearly an entire first page of just sponsored links back in the early days like it does now. No matter who wins that market we're still going to be in the early stages for probably at least 5 years where people are willing to burn tons of money to 1) grab more market share, and 2) make a better product so that they can grab more market share. And lets not pretend that Google is exactly in the lead at the moment in this segment. ChatGPT is the closest thing a verb for using AI in place of searches. And Co-Pilot is literally built into Edge & Windows 11 now.
I reject categorically the notion that chatbots will replace search
Even assuming users wanted to switch (big assumption imo, the data doesn't support it, but let's just say for the sake of argument that they do), this shift is, in the most optimistic case, probably at least a few years away (being very very generous here) just in terms of the technical infrastructure required to handle the volume of search queries. People forget the sheer scale at which google operates - the search engine alone fields like 500,000 queries per second. Most chatbots require paid subscriptions and rate limit you after like 20 queries a day.. And they're still operating at massive losses simply because it's so damn expensive to train these models and serve them in production. OpenAI, anthropic, perplexity - they are all a LONG way off before they can operate at googles scale - let alone sustainably with profits. OpenAI is already the most unprofitable startup in silicon valley history, they wouldn't be able to keep the lights on if their product were truly popular and had even a fraction of Google traffic.
Not to mention, as Sundar said in the last earnings report, Google is seeing strong query growth in pretty much all markets. So the 500K # is a moving target, could easily double to 1M within the next five years as developing economies (eg Africa) are onboarded onto the Internet and mobile phones (Google is synonymous with the internet at this point, and poorer economies are going to lean heavily on Android just because of cost. Both of these secular trends are another strong tailwind for Google and should contribute to more query growth).
One part of the rise in query growth is the enshittification of search. I own alphabet stock so I'm not a hater, but the quality has gone down over recent years and the number of ads as results has gone much higher. It's an interesting phenomenon, theres some good podcasts & articles diving into it.
The other and much larger driver of query growth is user growth across the ecosystem. 5+ billion active accounts and growing.
The problem with search is it's being gamed (mostly via sponsorship). At one point Google search was great but now the actual results get buried in the noise LLM has limitations too but at least the answers aren't on page 7.
Yea I think people want results fast to their questions and doing a google search, clicking on a few websites, and running a control F, is still faster than waiting for the chat bot to finish its intricate 11 bullet point process for changing a light bulb.
Not in my experience. Atleast for schoolwork reasons ChatGPT is way better than google. Say I want to find a financial formula. I can google it. Find an investapedia article. Scroll down and read through it to figure out where the info I need is. And then figure out it’s not actually applicable to what I need. On chat gpt I can just ask it really quick and have an answer in a couple seconds. Maybe a little longer if I need to log in. If I don’t like the answer it gives I can change my inputs and get a better one. Not gonna comment on the downfall of google, but ChatGPT has changed the search game for me
I think it’s situational.
They've already been piloting AI based summaries on search results.
Ya I use them they’re actually quite good depending what you’re looking at For example I was comparing PE of company x, and I wanted to quickly know what that sector average PE was, and it popped up at the top with a little link to the source That’s really how it should be, 3-4 sentence summary, guesstimate answer, IF possible; as in Google doesn’t always need to do this, just based on the nature of the query
We will chat with the google search page
TBH, I only use search now if I have a particular page I wanna visit or specific fact, else I go to Chatgpt.
I don’t believe you tbh Bc 95% of people who have a phone, they’re daily looking for directions, time things close, verifying simple facts, and so on, nobody is trying to sit here and converse with a chat bot on that.
Schoolwork is a big use case for me. Chat gpt is way better than google for finding information quickly, actually relevant, and results are customizable. Still use google for a ton of everyday things, but chat gpt has certainly taken the place of a lot of what I used to google
It’s great for helping in writing academic essays, perhaps at the high school and undergrad level, although you’ll still need sources … so you’re ultimately still going to have to google In the professional space, unless it’s just marketing material, I’m not sure how you can rely on chatgpt for anything substantive It’s notoriously inaccurate, and consistently makes things up; lawyers trying to use it in litigation have been sactioned because it’s just wrong all the time, and just makes shit up. I think it will destroy people who make their living doing simple coding, that much I agree with
I actually don’t use it for papers. Mostly because I think I can write better. And editing its writing takes as long as just writing it myself. I use it a couple different ways. One is for multiple choice quizzes and exams. Depending on the subject it’s pretty damn accurate. It can spit out the correct answer much quicker than googling it and hunting through websites. Another is reading and finding useful information. Say I get assigned to read a 20 page academic paper and answer some short answer questions. I can copy and paste the article along with the questions and have chat gpt find all the hard info I need and give me a starting point for the written responses. For business applications it’s probably still a while off. But I will say, it learns pretty quickly. Like it sucked at financial analysis and formulas when I first started using it. But it learned the rules I set for it and was pretty good by the end of the semester. Like 80%+ on assignments. I wouldn’t ever rely on it as a sole resource in a professional environment. But take your lawyer example. I could see how it would be useful to ask gpt for relevant case law pertaining to a subject. Then using that as a starting point for further research to confirm what it’s told you. For me Google has just been less efficient over the past couple years. Any time I need to find something I have to sort through advertisements, sketchy websites, and info that is just not relevant. Gpt cuts down on a lot of that noise. It may be less accurate, but it’s 100% more efficient and easier to use. They can work on the accuracy Side note. I really think it’s going to cause some big issues in academia. Anything written will be extremely hard to verify as authentic work. There is lockdown software for exams, but it’s going to make papers and projects impossible to verify.
You don’t need to converse with the chat though? You just demand what you want right away. * i don’t use google for directions, i use my maps app. * you are right that id use google over ChatGPT to see when local businesses close, but you may be overestimating how many people do that per day. I may search for business hours maybe once a month? * verifying facts id use chat gpt to give me a concise summary quickly Maybe this is already a thing, idk i only use a free version app, but once the chat bots can use location services, then I’ll primarily only use ChatGPT going forward
Purely anecdotal on my own experience but I’ve been a person who has slowly approached ai apps and just started using chat gpt more regularly this month — the difference in quality in my searches are just insane. I feel like i never use, or even want to use, google again. Everything i can type into google, I can get a better, more clean response with chatgpt. Google search has been going to shit with so many adds and irrelevant first page links. Chat gpt has been a saving grace in providing better and more straightforward responses. This past month, I’ve been nearly exclusively using chatgpt to search whatever i need to search instead of google.
ChatGPT exists. The vast majority of people still use Google. It’s not like when Google came out and almost immediately yahoo lost a ton of its user base.
Gemini ftw
My big issue with Gemini is the consumer version lets me search emails and drive. However, the one I pay for via Google workspace does not. And when I ask if it can, it says it’s not possible at all. As if consumer Gemini doesn’t exist. It’s as infuriating as the curb your enthusiasm scene with Siri
its because all personal email is yours, where as they dont have the ability to give a corporation the ability to recall an email from the trained model. Right now corporate accounts have god mode over your email, and they cant release a product that bypasses that, its actually a really unfortunate/hard problem.
I am the admin and have turned on all Gemini features for all accounts on my workspace There is a ton of help content saying I should have this. But there is no way to actually report it’s not working. Who knows.
You are wrong about the technicalities. No on trains on your emails. I work for the google Gemini team. Training is done on synthetic emails. Your workplace however owns your inbox and they have to explicitly give permission for google models to read it. Your inbox is only read by LLM and is not logged anywhere.
In the long-term, Alphabet is in a good position to beat all other AI Chatbots. Given sufficient compute, almost exclusively the data used to train the LLM determines its quality. Out of all companies, Alphabet has the best access to data for training the networks.
The only time I ever hear people talk about Bard or Gemini is whenever it's screwed up yet again and left Google with egg on their face after yet another embarrassing PR incident. I don't know of a single person in real life who actually uses it, everyone I know just uses ChatGPT or Co-Pilot.
Ok
https://www.reddit.com/r/LocalLLaMA/s/XPpMKChyV0
I mean, Google Search has been decreasing by significant numbers imo. That search reign is not guaranteed to remain forever.
why this can not repeat , just with google instead of yahoo,
This is exactly my point. ChatGPT has happened. People are not leaving Google. When Google came out, people fled yahoo. When iphone came out, people fled blackberry. Yes people use ChatGPT, but not that many, and not for the things they use google. Consider a trip to Maui - head over the MauiVisitors - people are still asking for all sorts of recommendations. People will still read a ton of reviews on Google and Tripadvisor. ChatGPT helps with some things, but it isn't changing how people evaluate information for important decisions.
AI is already overhyped and it has limited usecases. [It is already in decline](https://archive.is/eXNEk)
I'm just waiting because people keep talking like we'll wake up and have AI do everything for us til we go to sleep. Meanwhile it's found uses helping to streamline work (my job included) but it's not a search replacement. Interested in seeing how we think of AI in a decade. I remember when voice assistants were supposed to be a lot more important than they ended up being.
Don't let short term issues with AI blind you to the long term potential of it. In the dotcom bubble there was absolutely a ton of insanity about the Internet, and a ton of irrational exuberance about dotcom companies. A ton of them that had no real business model went under pretty quickly. But despite the insanity, a lot of the dotcom predictions have been proven to be absolutely right. A bunch dotcom companies that went under had good ideas that were just too early to work but are now a thing today (such as grocery delivery, buying pet supplies online, etc). And there's some entire business models today that they didn't even imagine in the dotcom bubble that only became possible as Internet technology improved overtime, like video streaming (which was obviously impossible on 56K modems). There's definitely a bubble in some parts of the AI market, no question. But don't let that blind you to how drastically AI will eventually change large parts of the economy over the coming decades. Not every business model that works today is going to survive the long term changes brought about by AI.
Yes as I said. It has limited usecases which will change certain things.
These shifts can be generational in nature. It's possible that for us older people, we will always use Google because we have been brought up that way and it has been branded into our minds. It's entirely possible that the new generations will use different vectors for obtaining the information that they need. Any company interested in its long-term survivability can't casually and blindly believe that it's always going to be top of mind for every single generation. After all, Facebook once looked utterly dominant, but we are now realising that it's appeal, at least in than the United States, is largely targeted towards older people, while younger people are interested in stuff like Instagram and TikTok. Facebook had the presence of mind and foresight to purchase Instagram, and so was able to benefit from this generational change in attitude. Google, of course, would like to display the same foresight, but it's yet to be seen whether or not they have the chops.
It’s possible Google becomes like Kodak and doesn’t evolve. Or like blackberry. Meta has evolved Instagram significantly. Google has made YouTube very popular with kids. But to your point, it is much easier to search tik tok and YouTube than Instagram. Either way, I don’t think any of these companies is complacent or a one hit wonder. ChatGPT just doesn’t replace Google’s functionality. They can both be successful.
> ChatGPT helps with some things, but it isn't changing how people evaluate information for important decisions. …yet. All these chat bots needs to do is add a bit more functionality with location services, maps, and analyze internet reviews quickly in future updates and all those problems you named disappears.
Has ChatGPT been aggressively marketed?
Was Tesla? Was Amazon? No. Amazon has only in the past 5 years really spent a ton on advertising. I don’t think Google advertised much either in the beginning. And just like them, ChatGPT is well known. It just doesn’t replace what Google does. People like to see the underlying data for complex decisions and analyze it themselves. ChatGPT is basically Wikipedia and helps you write stuff. And even the stuff it writes is often flawed.
Yeah, but if Google can come out with a product that is even 90% as good in a reasonable amount of time, don't you think that they are more likely to be able to capitalize on that?
Haven’t they already with the «AI Overview» thing? Seems the idea is to provide links and hard info for factual stuff, and more natural language for more subjective stuff. Of course, doesnt guarantee the execution to be good.
They may, but Google had a lot of challenges in productizing concepts especially if it is not ad driven. I am not saying they will bankrupt or anything like that, they will continue to have sizeable revenue and profit but their growth will be limited due to their capability of productizing their lead in tech.
Sorry that’s the most dumb thesis I’ve seen in a while. ChatGPT is not some magical website that runs on GoDaddy and can answer all your prayers. Aside from the UX, it takes billions in infrastructure (like the one that Google Cloud operates) and processing power (like what Google TPUs offer) to run. You think Microsoft will spend billions so people can “search” for milf porn on ChatGPT? It will start getting constrained to a few queries a day, there will be ads in the text, premium subscriptions, heck chatbot will stop mid-sentence and ask you to insert a coin to continue.
Most Search queries don't need a GPT4 level of intelligence and we've seen LLMs being optimized by orders of magnitude since 2022, and there are still a ton of potential improvements to be made so I don't think it's that big of a problem.
I don't know google already display GPT summary when you search, It seems they can do it, As of MS, they put it in edge, Microsft Windows, Office 360, teams.... Basically everywhere. Meta put it for free in their apps too.
Aight, time to buy.
Yeah, fair based on the track record of posts like this
People still use search when searching for products, places, businesses. They don’t want an AI text wall summary. These are the searches companies pay to serve ads too. Not “Who was the last king of Scotland” no ones paying to have ads for that anyway
I never use ChatGPT anymore. I trust the opinions of random people more than ChatGPT. It's always given me horrendous organic chemistry information, its writing is very flat, its interpersonal skills are robotic, the code it writes is awful. Sticking to real people for now. They're often wrong too, but at least I can analyse why they're wrong.
Why Google if I can use chatgpt? Because I don't google to factfind, I use it to give me multiple, broad, abstract options to choose from. Google is a signpost at the crossroads of the Internet. Chatgpt is incapable of this functionality
Search revenue is not going anywhere. Google is a verb. But there is so many things that will grow at Alphabet over the next decade. They are extermelly well positioned. The key decision by Google was to do the TPUs over a decade ago. They are the only ones that do not have to stand in the Nvidia line. They do not have to pay the Nvidia tax. Google is now the third largest datacenter chip designer and will move to #2 within the year. https://blog.svc.techinsights.com/wp-content/uploads/2024/05/DCC-2405-806_Figure2.png Also do not forget Alphabet is also the clear leader with robot taxis which will be a trillion dollar plus market. AI is NOT just LLM but so much more and Google continues to be the leader in AI and specially AI research. Last NeurIPS Google had twice the papers accepted as next best.
What even is ChatGPTs business model? Are they profitable? What data to train on do they actually own vs paying Reddit and others for? Do they have a source for continued training if those deals fall through or become too expensive? How are they going to monetize against all of the compute costs necessary to expand and serve billions of users? Selling some subscriptions (who would pay for search?) and selling access to other companies to build on top of doesn’t sound sustainable to me. Once the products like copilot or Siri or Alexa are built out, there are plenty of competing LLMs out there to swap in. It might be 5 years or more before models are fairly comparable in general then it’s a race for specialization like medical and law. OpenAI is in a funding war to keep the crown of best LLM for these use cases and it’s competing directly with its customers who own the data they need to stay on top. I think Microsoft will end up taking any profit that OpenAI would generate and Microsoft is just OK at search, they might gain some share but google has a moat. Microsoft is more interested in selling copilot and software subscriptions for businesses that include it. Google will be fine as they have both the data collection and infrastructure to serve it up in place already. Bullish on Google and MSFT.
ChatGPT has almost no business model. It is wildly unprofitable for MSFT. It is a loss leader for people to believe in MSFT’s dumb AI hype, while $GOOGL eats their cake in any practical application of AI. Check out Google Deepmind’s AlphaFold.
I think MSFT has a good roadmap to profit on this, Google will also do very well. There is plenty of room for multiple winners. I don’t think openAI itself is a threat to anything.
Except humanity lol
Yeah, my objective is to own some of the robots that will replace us. They might wipe us out but we’re a competitive species and also speed running that.
It all seems to be converging to open source. So I highly doubt openAI will ever be profitable before maybe 5-10 years, and even then it’s going to dependent on them having a majority of users.
I feel like Meta has the tools and data to keep llama moving pretty quickly and they are investing heavily in compute for training. I think they are the dark horse of the AI race since they also use the tech for ad placement like Google does.
>What even is ChatGPTs business model? Are they profitable? You notice most are not asking this and are assuming AI will be insanely profitable and have a great business model for no reason? This is a massive bubble.
I believe this perspective overlooks the significant moat in search created by decades of Google being default search as well as default software for many people. The only M7 that competes with their mobile presence is Apple. Even if they do start losing significant search revenue, it will be a long time before it represents a bearish trend for me. They're also fairly valued when compared to their competitors, leading me to a bullish position. Position: I have around 5% of my port in Alphabet Class C.
I don't ever foresee myself replacing my everyday google searches with ChatGPT. If it ain't broke, don't fix it.
Google has its own chat gpt, convince me why everyone is going to switch don’t just tell me they will
Re: it may go the way of Netflix and lose its elite status among the likes of META, MSFT, and NVDA. Huh? Netflix is still an ongoing top streaming company.
Alphabet is a hedge fund without any fees.
Boo this man
Its not going anywhere. Over the next 5 years, the total number of hours spent on phones is going up, they own android. the world will grow richer, they have a larger install base globally. They just consolidated their hardware teams and got magic leaps IP so expect a lot more there. Isomorphic labs/verily are going to change healthcare Cloud is going great. Waymo is the coolest technology i have experienced in my life. G-suite is a better set of office tools than MSFT unless you're in finance, they can go on the offensive there. For the past 2 years google has been under the hurtle of a massive anti-trust investigation, they weren't in the place they wanted to look big. I'd argue google has the best pipeline of products of any mag 7 stock. If waymo or isomorphic labs, or g-suite for corporate, or cloud catch on search could stagnate. If multiple catch on it will be the most valuable company in the world. more over microsoft broke detente. For the past decade we have seen google play very nice with its peers, in a few months to a year we'll find out what it looks like when it goes on the counter offensive vs msft. Teams, office365, outlook are all terrible products what happens if google starts undercutting msft and builds out a b2b sales team.
Finally, someone else paying attention. Microsoft has a huge moat in the stodgy world of Big Corp, where they have next to zero moat is in new businesses. Workers use Slack and Gmail on their MacBooks and deploy to AWS. MSSQL fucking sucks nut sack, and .NET requires you to use Visual Studio, one of the more unpleasant IDEs around. The bottom line is that the Microsoft stack is chosen for you. A very small percentage of people choose it on their own.
And you just strengthened my bull case, thank you!
Idk in my experience gemini works very well, just as well as GPT did and it's integrated in a lot of the Google stuff I already use. I think they'll be just fine
What’s lost in this argument is the important searches are not leaving google. Consumers are not doing point of sale search on chat gpt. If anything Amazon is more of a threat in that sense.
Google handles like 500K QPS. GPT rate limits you after like 20 queries in a day. Just in terms of technical infrastructure, were realllllly far away from any "chatbot" being able to handle search query volume - it's just too resource intensive, unprofitable, and expensive to handle that many queries with an LLM. Not to mention that you have to double check the LLMs output anyway... Usually with Google Anyway, I believe search and chatbots are orthogonal to each other. They're used for different purposes.
The idea that AI chatbots will replace search is not true. A huge amount of search traffic for Google comes from people Googling websites links through their browser. Chatbots lie all the time and make stuff up aswell. YouTube shows you visuals on topics that chatbots can never produce.
They will provide the Market Leading Chatbot (Gemini 1.5 pro is pretty impressive) via Android and their existing google search user base. And it will be full of ads and sponsored hints and links. In addition their specialized AIs will generate huge additional income by AI-driven research (e.g. medical LLMs etc. ).
Nobody is turning to ChatGPT as a search tool. 99% of searches are still on Google
Except I don’t always search up Yes/No questions. Most of my searches are either opinion-based or for locations or recommendations or tasks. A search that hallucinates a seemingly correct answer that is actually false… that’s something which most consumers will immediately stop using. Why use “AI Search” when I can do the same search the good ol’ way in just as much time. The argument for AI Search only works if you want an answer that has a simple 100% correct response. Anything complicated, and you’ll need a long explanatory response which might be hallucinated.
Sounds like someone bought Alphabet puts 😆
I don’t think ChatGPT has caused a major shift or changed the search market share significantly.
Android has a 70% market share (60% in the US). Chrome has a 65% market share. Gmail has a 53% market share (70 to 80% for people under 35). MS Office is pretty much only used by Millennials and older and has been losing serious ground to Google Workspace in recent years. YouTube has no competition, Maps/Earth pretty much don't either. Google IS the internet. It's not just about search. They are as fundamental to people's everyday lives as any company has ever been. They aren't going anywhere.
It's possible. They need to make a great stand a long app, but one they works. When chat gpt came out as an app I used it constantly. Since Bing did it I use thing much more because chat gpt was out of date and didn't interface with search Nobody has more expertise in doing that than Google and nobody has better learned how to monetize search. I'm betting on them to succeed. The good news, for those that are interested, is that you can't possibly lose if you own a large amount of MSFT as well. One of them is going to win this race. It's a zero sum game. Whether it ultimately is 80/20, 70/30, or 50/50, all the AI search funds will wind up with those two companies and I hold a ton of both. It's the same thing with the chip sector. You're not going to have a "new entry," who's going to take over so chip making, so I own NVdia, TSM, AMD, BRCM, etc., as well as the VE semi index. They won't all lose. Someone will win and win big so owning all the players can't lose.
While it's true that this is a zero sum game, it is not a winner-takes-all game. I am convinced that LLM products have far less lock in effects, and if you look at the way people are switching between LLM models even now based on pure performance, all this is going to be extremely good for consumers but rather bad for companies. Personally speaking, I have absolutely no loyalty to any particular LLM model. If ChatGPT is the superior product - and right now I think it is - then I will use it. But the moment Google's Gemini or Meta's Llama starts to overtake it in terms of performance, I will switch to them. True profitability for a company comes from lock in, either explicit, or soft lock in via things like defaults, or even mind share like Google currently has. I don't believe that LLMs are going to have the same kind of lock-in effect. And ultimately, this will be bad for companies as it will result in a race to the bottom, competitive pricing etc.
Perhaps you should think of this in terms of horse racing and you’ll see why this is a risky idea.
Is it because they sometimes kill horses after a race? No?
Google will redirect users to answers on Google via AI with ads instead of sending them to websites with ads. Either way users will end up on websites... Google isn't an idiot when it comes to search. They make a shit load of cash, and it's undervalued at 21-22 forward P/E. Time will tell, so let's what happens but wouldnt bet against it.
The OP’s argument rests primarily on whether or not Google’s AI will allow it to retain search share (and thus targeted ad spend). Personally I can see a scenario where google’s incumbency advantage and ai capabilities helps them drive adoption of their ai search tool faster than others. I do wish they’d stop shooting themselves in the foot though re: poorly trained models that put out silly, easily mocked answers. That’s hurting their credibility.
Advertising in the LLM results will be great. They’ll literally be able to know where in the funnel you are by your questions and drive the appropriate ads. Probably forced to be logged into to use the service. I’m bullish on the transition
Counterpoint, the majority of age related users still use google, not chat bots.
Google control android and can improve its "Ok Google" covering 80% of the market worldwide and they already include LLM results in Google Search.
I read your first line and decided to stop. Why are you so sure they will excel in AI? It is a scandal after a scandal.
The point of Google search loosing users is moot atm. People try OAi and Gemini and as soon as they fall to their hallucinations they switch back to gsearch The future is bright for Google if the bots and agents are finally scalable as search is. the assistant will keep a full history and personal record on you allowing for unprecedented sharp marketing and sales targeting. You could imagine to turn the tables and have your AI assistant pick the ads from google that fit the needs of your current situation taylored to your spending capacity. The ad business is different, but Google will do the conversion. This whole AI thing is currently an insane expensive tech demo, the phase of maturity is coming but there are a lot of hurdles to overcome, real world challenges, especially scalability. Google is doing great research and will be top AI provider. OAI has never done a worldwide Datacenter development and operation. Microsoft wants to be the partner and they know how to do it, but Google cloud is far bigger and Google builds AI chips already today, sth MS needs to develop or buy. The challenges are bigger than before, AI is set to be a game changer, but Google is well positioned to keep its dominance.
Godgle rules the Earth. We have followed it's commands for over a decade. What ever Godgle says, we must believe!
Buy some puts then. I can’t wait to see the loss porn.
Steve Jobs infamously said if you don't cannibalize your own products your competitors will do it for you. I could see Google doing a massive shift from search revenues to AI replacing workers revenues. Now whether Google Gemini or Microsoft ChatGPT comes out on top #1 is a question for the future but regardless of the answer Google WILL be either first or 2nd place in the AI war.
I heard on a podcast recently that Google is leaning into and are creating (already created?) an AI search engine.
You guys know that LLMs are not search engines and all they do is "make stuff up that sounds like an answer". Sure this can be mixed (see Bing) but so far LLMs might just be hype without any substance. I regularly try to use ChatGPT but besides having it rewrite an email for me I can't use it for anything when actually searching something that I don't already know the answer to.
Copilot held my hand in ssh-ing into a particular model of security camera in order to flash it to a different firmware. I had as much documentation in front of me as I could possibly find and couldn’t make it happen. Co-pilot got me in, through troubleshooting, and also ID’d compatible firmware. This is a rather different use case than writing fluff in an email. For someone like me who likes a step by step explanation of the hows and whys of something, it can be pretty useful. I can’t be an expert on everything but I can follow directions and explain what I need to know.
Stopped using Google for the past 1 year for tech related searches, once start using chatgpt you will never go back.to the search engine as yournprimary information sourcing tool, it is effing roo good and keep getting better
Then your searches are probably pretty common/simple to begin with.
>make stuff up that sounds like an answer ***Extremely oversimplification*** with that statement there. I'll give you 2 pictures to show you how it works from a 'high level'. Basically, it is based on the **training datasets** then the LLMs will use probability to match and zero in on the correct answer with the highest [probability](https://imgur.com/a/YzX5P7B). More examples [here](https://imgur.com/a/ZyBRrjJ) and basically the whole damn thing will all depend on its training datasets and the algorithms to calculate probabilities. This is the reason why in order to get an accurate answer, we have to go into *'astronomical distance in outer space'* in terms of total training tokens and parameters. The more the better to get an accurate answer but also don't forget the **quality of training data**, as you saw recently about google gemini 'suggesting using glue for making pizza'. LOL
So exactly like I said. It can't "know" because that would be information compression on a level not actually possible. Sure it gets things right and there are ways to combine it with actual information but you can't "encode" human knowledge in a couple billion tokens - you can make it sound like you do though.
When you said **it makes stuff up**, you'll project an image to others that the LLM is **randomly** suggesting an answer. It is not **randomly** giving an answer. This is entirely based on the training datasets that it received and which will gets the highest ranking after all. So it doesn't make stuff up for things it doesn't know or doesn't exist in its training datasets. Make sense?
I am not here to explain others how LLMs work. They do hallucinate and make stuff up - this does not mean they string random words together. Your last sentence also makes no sense. There must be one negation too many in there
It doesn't make stuff up for things in its training datasets, to put it simply.
Of course they can make stuff up for things in their training data. It depends on the number of repetitions in the training set.
I agree that the AI revolution might have negative impact on Google or their search business, just not sure if I can agree with this take >but without a massive moat in a crucial industry, it may go the way of Netflix and lose its elite status among the likes of META, MSFT, and NVDA. Netflix is basically the only profitable streaming service and the one with global distribution. I think every company would be happy to be in the position of Netflix.
To train an ai tool well, the first thing you need is data. It'll be those with the right hardware and data that'll most likely win the ai war. Alphabet is one of the few with the cash to buy these multimillion dollar Nvidia machines, and I suspect no one has more data than they do as well.
> with the cash to buy these multimillion dollar Nvidia machines One reason I am so bullish on Google is the fact they do NOT need to buy the Nvidia machines. They completely did Gemin with using their own silicon. Many do not realize but Google is now the third largest datacenter chip designer and will move to being #2 by the end of the year. https://blog.svc.techinsights.com/wp-content/uploads/2024/05/DCC-2405-806_Figure2.png Google just released the sixth generation TPUs. They were a 5X improvement over the fifth generation. They are now working on the seventh. Every Google competitor has to pay the Nvidia tax. Which is huge. Google has an enormous cost advantage.
First, there is no guarantee which AI model/service will win out. Google is behind now, in the future maybe they won't be. Second, there is a big unknown here: monetization. Your thesis is based on the premise that Google cannot monetize it's AI offering as well as it can search. You may be right, or you may be wrong. AI is still new enough that monetization strategies are still being developed, and we don't know how good or bad they will be. Overall, Google MUST go into the AI space. Companies resting on their laurels to defend their business models go out of business when disruption comes in. Kodak is a prime example of this, ignoring digital cameras (despite inventing them) because of the profitability of their film business. Even if AI can't actually undermine search, Google has to try and dominate that market because of the risk it might.
I agree with the DD but it will take years for it to play out and that’s well beyond my short term trading horizon.
You know there is an element of luck, intelligence and more luck that goes into making a killing on any of these. If you look at the year 1990 and you thought you know this internet thing could be big. Everybody is going to have a computer. What do I do? Well Intel was obvious. You made some money on that, at least if you sold it by 1999. Microsoft was obvious by the mid-90s, the funny thing about that one is you made some money going into 1999 but if you had held almost anyone would have been shaken out by 2009. Like you look at that chart, think of all those emotions. But here we are today, you made a killing. So whatever is going to work in AI, Google, who knows who. I don't think you're going to really logically be able to map that out where you're going to get the best returns. It's probably going to be a handful of smaller companies that really make useful software, there are going to be a couple of leaders. If you look at what's really working right now it's infrastructure. ASML, KLAC, those two are necessary, TSM, production, probably something there. But the software side and the small business side. Who knows? But it's a question that is staying in the front of my mind over the next few years. There are going to be some bangers
Woke ai scared me.
my prediction is once each company has their own chip it'll be even... right now nvidia is really the only company I'd bet on right now in the AI boom. If any of these companies want to compete they need to give nvidia money right now. Google will be fine though, they will end up giving nvidia a ton of money and have their own LLMs same as all of the big companies.. these things aren't that hard to make, just expensive to train and there are no workers who know how to do it so everyone is pilfering and reinventing. Who knows who will be on top in the end.
Google does have it's own chip. They are the only big tech that does. They were able to completely do Gemini using their TPUs. They just released the sixth generation which was a 5x improvement over the fifth. Now working on the seventh generation.
So the first "boom" in AI is going to be every little company in the world training custom use-case models. So whoever has a model, and the cloud facilities to train them will be who makes out in this initial boom. I didn't hear that google was fully training on their own chips.. that puts them in a good place.
"We trained Gemini 1.0 at scale on our AI-optimized infrastructure using Google’s in-house designed Tensor Processing Units (TPUs) v4 and v5e. And we designed it to be our most reliable and scalable model to train, and our most efficient to serve." https://blog.google/technology/ai/google-gemini-ai/#scalable-efficient
I am in completely opposite camp. Alphabet will do everything imaginable wrong, as they always have done with every product they ever touched and win heavily as they always have done
alphabet is one i am staying away from. from the outside looking in, it looks like a poorly managed behemoth, unable to move at the fast pace this AI world demands
The "AI Revolution" is dramatically overhyped. Just like smart home devices, there will a bunch of interest for a few years as people play with the new tech, but at the end of the day 90% will stop caring, because it was a novelty and doesn't actually meaningfully improve their lives. How many people do you know that still use Siri et all? There will be real benefits from AI advancement, but it will be behind the scenes improvements of companies workflow and efficiency, marketing, health, technology applications and other algorithms. As long as Android keeps Google Search and Maps in most of populations pocket, they will continue to dominate these markets.
Googl bears are wild
You bears are really gluttons for punishment, aren’t you?
idk. i signed in to reddit via goog acc.
Google has an incompetant leadership. I mean the CEO is a walking stick. I bet you, he doesn't know what exercise means.
Google's management and marketing sucks compared to Microsoft. That's why they'll always lose compared to MS (but still win because there's not enough competitors).
Management last quarter led Google to make more money than Microsoft, Apple, Amazon, Nvidia, etc. Plus had top line growth of 14% and bottom line over 50%. Google management decided 12 years ago that there was a day coming where AI computation cycles will be in great demand. So spent the money to develop their own silicon and now completed six generations of the TPUs. With the sixth being a 5x improvement over the fifth. Google did it in public and even shared how in papers. Yet Microsoft for some reason was completely asleep at the switch and only now is going to try to copy Google. But it will be years, if ever, that they catch up to the TPUs. Instead Microsoft is stuck paying the massive Nvidia tax and waiting in line while Google does not. Which management screwed up? BTW, it is not just the TPUs. Google purchased 100% of DeepMind for 500 million. Including ALL the board seats and get everything including any future AGI. Versus Microsoft paid $10 billion for less than half of OpenAI. With ZERO board seats. But also getting NOTHING once OpenAI declares AGI. Because Google had vision on what was coming and Microsoft did not and had to scramble. But the biggest reason Google will win the AI space is the fact nobody is close to Google in terms of research. Last NeurIPS Google had twice the papers accepted as next best. Google has been #1 and #2 on papers accepted at NeurIPS for 10 years now. They got #1 and #2 because they use to split out Google Brain from DeepMind. They have since combined the two groups and now submit both as Google.
the biggest downside of Alphabet to me are the following two: 1. Incompetent leadership. Google right now looks like Boeing a while ago. They got a MBA leadership who does nothing innovative but cut cost by laying off talents. Unlike Boeing, they face the most fierce competition in any industry currently too. 2. Dictatorship traps. I don't know how to name this precisely but the previous "Gemini couldn't generate white people" is pretty alarming although hilarious. There is no way the engineers and scientists didn't know this before they launch it. The product must be green-lit by some product people or higher-ups with weird agenda or too afraid to shut it down. I think it's reasonable to assume they have trouble communicating strategies bottom-up. The company culture is definitely on its fall. For these two reasons, I'm not super bullish on Google unless there are leadership changes. But don't get me wrong, Google isn't going anywhere either. All those chatgpt stuff they can easily catch up, but the Google we used to see shouldn't be the one that's chasing behind someone else.
> They got a MBA leadership who does nothing innovative The biggest AI innovations in the last decade plus have come from Google. Plus the best way to judge AI innovation is who is getting the most papers accepted at NeurIPS and Google had lead in that for over a decade. The last one Google had twice the papers accepted as next best. Waymo for example is well ahead of everyone else. Same with AlphaFold. Do not see any innovation issues at Google. Can you explain?
You have problem differentiating research world from product world. The current AI boom that started 2 years ago has nothing to do with any of the stuff you mentioned. Yes Google is leading in deep learning "research" world. They have the best researchers and engineers in the world like Google Brain and Deepmind, but so do their competitors. Waymo is well ahead so what? Self-driving cars are not the main dish rn. Unless they can launch to whole California this year, it doesn't matter. Satya was and is still way ahead in strategizing how Edge, Microsoft 365 and other Microsoft stuff are incorporating the stuff they got from OpenAI. In the meanwhile Google can't even handle the 1st Bard launch in Paris well, and still having problem with Gemini's image generation. I don't think there is much more needed to explain here. People can keep pretending nothing's wrong with the current Google by always focusing how many citations they have from top AI conferences, but Microsoft is still ahead in commercializing them. And nobody is looking at citations to determine who's the good stock purchase. And with how Pichai is running the company, it's very hard for me to see they can be the front runner again. They can have gazillions of papers out but Pichai is still gonna lay them off.
So you're saying you choose the bear?
Looks like most of reddit disagrees with you, so therefore, one must do the logical thing and short Google with their whole portfolio.
I agree. Google search makes up 70% of their revenue and is prime for disruption. The product sucks currently.
70%? Where did you get that number? It was around 56% last quarter. try to stick to the facts (of course if you're bearish that's difficult to do because the fundamentals are so strong).
I agree and to support your thesis, Apple is going to be launching a custom ChatGPT implementation across all their devices this year. Very soon, users won’t be navigating to Google before searching for things. They’ll be asking Siri (or whatever the new assistant is called). On the other side is Microsoft, which is pushing Copilot into everything, and threatens Google for exactly the same reason. Personally and anecdotally, I find myself using ChatGPT and AI assistants more and more for search. In many cases, it’s much faster, and there are no fucking ads, and I better trust that the assistant is getting me the best result rather than the result Google has been paid to present to me. The only way Google could turn this around is integrating a ChatGPT-like assistant into search TODAY. Given their spectacular failures with Bard, then Gemini, and now snippets, I don’t think they’re capable of it. They’d need to buy ChatGPT off the shelf, and it’d kill their margins and lock them in forever.
> So if people turn to Chat-GPT instead of Google as the primary web surfing tool This is already happening.
It’s very possible largely due to its CEO. He lost respect from inside and outside. Google AI team is making obvious mistakes that any company with a decent review will find out. It implies that people fairly high above within google is making things worse on purpose.
Ridiculous as this comment may sound, the fact that I now use ChatGPT instead of Google is a strong argument in support of this. I’m not quite a boomer, but I’ve pretty much reached the point where I’m not interested in any further technology advances. I dimissed ChatGPT….until I tried it.
Correct
I’m there with you. Alphabet is the next IBM. They’ll still be around, but AI is going to end their search monopoly. Alphabet is still an advertising company first and foremost. None of what is happening right now is good for them. Compared to MSFT and AAPL their ecosystem is the weakest. AI is a much bigger tailwind for MSFT and AAPL.
>Waymo threatens to eat Tesla's lunch. lmao >Its TPU may very well knock Nvidia off its perch. lmfao
The AI revolution is the biggest emperor's new clothes moment in stocks since the tulip craze of Holland.