A titanic battle for A.I. domination is starting, and almost every big tech company is devising a strategy. But while Microsoft CEO Satya Nadella seems to be in the lead following its major investment in OpenAI, the creator of ChatGPT, other companies may be playing the long game.
In the course of a few months, artificial intelligence has catapulted from the realm of research labs into the public domain. ChatGPT arrived in November and last month hit 100 million users, while Google and Microsoft have made a flurry of product announcements in recent weeks and are expected to launch their own A.I.-enhanced chatbots soon.
Nadella himself referred to the A.I. competition with Google as a “race” when he announced Microsoft’s A.I.-assisted version of its Bing search engine earlier this month. But with such a lucrative market on the line, don’t expect only two factions in the coming war.
“This is an A.I. arms race that’s happening,” senior tech analyst at Wedbush Dan Ives said in an interview with CNBC Tuesday. “Obviously, this race is just starting.”
Ives said Microsoft is “top of the mountain” at the moment when it comes to A.I. after the company’s $10 billion investment in OpenAI, but warned that most other major tech companies are working on their own A.I. game plans.
“You look at what’s happened: It’s a Game of Thrones battle between Microsoft and Google, and Apple that’s just quietly sitting there right now,” Ives said, adding that he expects Apple to make some “significant A.I. announcements” as early as this summer.
While Google, Microsoft, and even Chinese search engine Baidu are battling it out for A.I. on the search engine front, Apple may be working on a different strategy. Ives predicted Apple will “integrate A.I. more into the App Store and more into the actual devices,” and expects the next generation of Apple iPhones to come equipped with greater A.I. capabilities.
Apple is unlikely to be involved in the A.I. search engine wars directly, as the company receives billions of dollars annually from Google to keep it as the default search engine on the iPhone, but could still be poised to benefit regardless of who wins between Google and Microsoft. Both companies could engage in a bidding war for their search engines to be placed on Apple devices if their A.I.-enhanced technology performs comparably.
Earlier this month, Nadella told The Verge that increasing Bing’s user base is Microsoft’s goal, as even marginal gains in search engine market share from Google could translate into billions in extra advertising revenue.
Amazon is another company likely evaluating the situation and the Google-Microsoft A.I. war, Ives said. Like Apple, the e-commerce giant is unlikely to be directly involved in A.I. applications for search engines, but the company has recently explored integrating generative A.I. similar to the technology powering ChatGPT with its web services division, Amazon’s on-demand cloud computing and API platform.
Amazon CEO Andy Jassy said in an interview with the FT this week that the company is exploring “opportunities” to partner with smaller A.I. startups competing with OpenAI, without elaborating on how A.I. would enhance its web services platform, which primarily sells to companies.
In his CNBC interview, Ives predicted Amazon would use A.I. to enhance its business and sales operations to other companies. “I could see them specifically navigating on the enterprise,” he said. This week, Amazon Web Services announced a new partnership with Sway AI, a startup focused on creating accessible A.I. applications for businesses.
What it all adds up to is an A.I. arms race that extends far beyond search engines, and Ives said interest in A.I. is unlikely to be a passing fad.
“This is just starting,” he said. “I don’t view this as a ‘hype cycle.’ This is real spending, and I think that’s the difference versus other, we’ll call them hype cycles that we’ve seen over the past few years.”
