Last month, all the alarms went off in Mountain View. Even the New York Times devoted an entire article to the “Red Code” exploded in the company's tallest structures.
The reason ?
Artificial Intelligence has taken a giant leap that could jeopardize Google's core business, search.
We may soon see the decline of one of the companies from trillion dollars, and with it the disappearance of entire industries such as SEO, SERPs and digital marketing?
Google, despite being the first monopoly on the Internet, is very exposed. Google is currently valued at $1,13 trillion. In November 2021, Google was a nearly $2 trillion company.
It has seen quite a decline over the past year, but remains the fourth largest company in the world by market capitalization.
Revenues are important: $256 billion in revenue in 2021. More than Portugal's entire projected GDP for 2022.
Looking at Google's business model, we can see that there is a diversification problem.
If we look at Google's quarterly results on the monograph published by visualcapitalist:
Google in June 2022 managed to get an income of 69,7 billion dollars. Almost as impressive as their final profit, $16 billion, which is a 23% profit margin.
But if we look closely, we see that of the $70 billion in revenue, $41 billion—nearly 60 percent—comes from a single source, search advertising, the industry where Google has about 92 percent market share.
And the problem is that this is, specifically, the market that AI has the potential to disrupt forever.
These days there is a lot of talk about ChatGPT, an incredible technology resulting from OpenAI research. OpenAI is a non-profit company founded by Elon Musk and Sam Altman, and in recent years has published and distributed several products based onArtificial intelligence.
It recently released the latest version of its chatbot, ChatGPT, powered by the largest transformative language model ever assembled, GPT-3.5, with over 175 billion parameters.
Chatbots are applications with which it is possible to talk, and surely you have already had a conversation on the phone with some Call Center and customer service.
On average these chatbots are quite annoying and limited.
ChatGPT can answer almost any question with extremely eloquent answers, code anything you want in many different programming languages, write completely new bedtime stories, debug a program code, and more.
It's so impressive that some have claimed it could be the first model of artificial intelligence intelligent and sentient.
GPT, just like any other neural network, is a probabilistic machine; it is able to predict with an astonishing success rate the next correct word in response to a sentence, thus creating perfectly crafted sentences while sounding very human when interacted with.
But being highly successful at predicting eloquent responses is one thing, being able to truly understand what they're responding to is another. In fact, cutting-edge artificial intelligence is not sentient.
Unlike Google Search, ChatGPT frees you from having to endlessly scroll through pages of links by giving you concise and direct answers. People may therefore prefer querying a GPT Chat instead of searching via Google. And that could put Google at risk.
These are not sentient models but mathematicians, who have learned to respond with large amounts of data, are very dependent on having unbiased data sources and diverse teams of data engineers.
Assuming most engineers (of diverse teams) aren't racist, they are certainly heavily culturally biased, which isn't great for AI models that intend to become universal and applicable across society.
Surely the future of search engines will be driven by artificial intelligence, so although today's AI models are limited and dangerous for mass use, ChatGPT has shown us what the future will undoubtedly look like.
Luckily for Google, its large language model, LaMDa, and certainly has taken note of what LLMs are capable of thanks to OpenAI.
However, all of this goes to show how disruptive AI will be. But not only for you, for me and for individuals, but also for the largest companies in the world.
Ercole Palmeri
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