AI War: Microsoft vs Alphabet, Who‘s Going To Win The Race?
With the launch of ChatGPT, Microsoft has won the first battle of the AI war. But, Alphabet is not ready to give up just yet.
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Artificial Intelligence (AI) has been the most trendy topic within the tech world since the launch of the AI-driven chatbot ChatGPT by OpenAI, a US-based company partially funded by the likes of Elon Musk and Alphabet. Although AI is not a particularly new subject, it now gauges the interest of every technology investors and large corporates.
Today, Microsoft and Alphabet are the most advanced players within the GAFAM, and both plan to be at the forefront of the AI revolution ahead of us.
In this article, we’ll explore which one of Microsoft and Alphabet is the most likely to be the next AI leader by analysing their acquisitions made in the space as well as their internal product developments.
Let the AI race begin!
Microsoft and Alphabet have been actively acquisitive in the AI space
Microsoft has made several acquisitions and investments
Here are some of the notable investments made in the Artificial Intelligence space over the past few years:
OpenAI (2019, 2023): an AI research laboratory, to accelerate breakthroughs in AI and help both companies commercialise advanced technologies.
Nuance Communications (2021): a speech recognition and AI company, to bolster its healthcare offerings.
Softomotive (2020): a robotic process automation (RPA) company, to enhance its Power Automate platform with AI-driven automation capabilities.
Affirmed Networks (2020): a company that provides virtualised mobile networks, to expand its 5G offerings with AI-driven solutions.
CyberX (2020): an industrial IoT cybersecurity company, to enhance its Azure IoT security capabilities with AI-driven threat detection.
Orion Systems (2019): a company that specialises in AI-powered visual recognition, to enhance its video and image analysis capabilities.
Mover (2019): a cloud file migration company, to help customers migrate to Microsoft 365 with AI-driven tools.
Bonsai (2018): a startup that specialises in machine learning, to improve its own autonomous systems capabilities.
Semantic Machines (2018): a startup focused on conversational AI technology, to enhance its virtual assistant Cortana and other chatbots.
Lobe (2018): a company that makes it easy for people to build custom machine learning models, to expand its AI and cognitive services offerings.
XOXCO (2018): a company that creates conversational AI experiences, to improve its bot framework.
Maluuba (2017): a deep learning startup, to help advance its AI research and development.
Genee (2016): a virtual scheduling assistant, to integrate its AI technology into its Office 365 suite.
SwiftKey (2016): a popular keyboard app that uses AI to predict and suggest text, to improve its own AI-powered products and services.
Wand Labs (2016): a startup that creates messaging apps powered by AI, to enhance its bot framework.
Equivio (2015): a company that uses machine learning to analyse large amounts of text, to improve its e-discovery and information governance offerings.
Metanautix (2015): a startup that specialises in big data analytics, to improve its Azure cloud platform and its big data capabilities.
Alphabet has also acquired many AI-powered businesses
Alphabet, the parent company of Google, has made several significant acquisitions and investments in the Artificial Intelligence (AI) space. Here are some of the notable ones:
Anthropic (2023): an AI startup co-founded by ex-OpenAI employees, specialised in text-generative AI.
Alter (2022): an AI avatar startup that helps creators and brands express their virtual identity backed by Twitter.
DeepMind Health (2020): Alphabet's DeepMind announced a partnership with the UK's National Health Service (NHS) to develop AI technology to improve healthcare, including a system to detect early signs of blindness.
Vilynx (2020): a video AI company that develops technology to automatically analyze and classify video content, to enhance its video offerings with AI-powered capabilities.
North (2020): a smart glasses company, to improve its hardware portfolio and integrate its AI and machine learning technology into future products.
TytoCare (2020): a telehealth company that uses AI to enable remote medical exams and diagnoses.
AppSheet (2020): a no-code app development platform, to enhance its cloud offerings with AI-powered automation tools.
Looker (2019): a business intelligence and data analytics company, to enhance its cloud offerings with AI-driven insights.
Elastifile (2019): a cloud-native file storage company, to improve its cloud storage capabilities with AI-driven solutions.
Superpod (2019): a company that develops a voice-enabled question-and-answer platform, to improve its natural language processing capabilities for Google Assistant.
Onward (2019): an AI-powered customer service platform, to improve its customer service offerings for its businesses.
Fitbit (2019): a wearable fitness tracker company, to enhance its health and wellness offerings and expand its hardware portfolio.
Redux (2018): a startup that develops technology to turn surfaces such as phone screens into speakers, to improve the user experience of its devices.
Kaggle (2017): a data science community and platform that hosts machine learning competitions, to enhance its AI and machine learning capabilities.
Limes Audio (2017): a company that develops speech enhancement technology, to improve the audio quality of its products, such as Google Meet.
Halli Labs (2017): an AI startup focused on machine learning and natural language processing, to help enhance its products and services in India.
Senosis Health (2017): a startup that develops smartphone-based health monitoring apps, to improve its health-related products and services.
API.ai (2016): a company that develops natural language processing and machine learning technologies, to improve its virtual assistant Google Assistant.
DeepMind Technologies (2015): an AI startup focused on deep learning, to help advance its AI research and development.
Microsoft and Alphabet have heavily invested in AI-based product developments
Microsoft has a wide range of AI-powered products
Cortana: an AI-powered virtual assistant that can schedule appointments, send emails, and perform other tasks.
Microsoft Cognitive Services: a suite of AI-powered APIs that provides developers with access to advanced machine learning and natural language processing capabilities.
Microsoft Azure Machine Learning: a cloud-based platform for building, training, and deploying machine learning models.
Microsoft Bot Framework: a platform for building and deploying chatbots using natural language processing and other AI technologies.
Microsoft Dynamics 365: a suite of enterprise resource planning (ERP) and customer relationship management (CRM) software that uses AI to automate tasks and provide insights.
Microsoft Power Platform: a suite of low-code development tools that use AI to automate workflows and enhance data analysis.
Microsoft Personalizer: an AI-powered product that provides personalized recommendations and experiences for users.
Microsoft Video Indexer: an AI-powered product that uses machine learning to analyze and extract insights from video content.
Microsoft Office 365: a suite of productivity software that uses AI to provide features such as intelligent search and natural language processing.
Microsoft Azure Cognitive Search: an AI-powered search service that uses machine learning to improve the accuracy and relevance of search results.
Alphabet has conducted several initiatives to foster its AI offering
Alphabet’s recent initiatives
Alphabet's AI fund Gradient Ventures (ongoing): Alphabet established Gradient Ventures, an AI-focused venture fund that invests in startups that leverage AI and machine learning technologies to improve industries ranging from healthcare to robotics.
Alphabet's AI research lab Google Brain (ongoing): Alphabet's Google Brain is a research lab focused on advancing AI technology, including deep learning, natural language processing, and computer vision.
Alphabet's AI-powered search engine Google Search (ongoing): Google Search uses AI and machine learning algorithms to provide personalised search results and answer user queries with greater accuracy.
Alphabet’s main AI-powered products
Google Assistant: AI-powered virtual assistant that understands natural language commands and provides personalized assistance.
Google Cloud AI: a suite of AI and machine learning services offered by Google to businesses and developers.
DeepMind: an AI-powered product that focuses on artificial general intelligence (AGI) and has been used to develop algorithms for games and medical research.
TensorFlow: an open-source software library for machine learning that provides a framework for building and training models.
Google Photos: an AI-powered product that uses machine learning to organize and categorise users' photos.
Google Translate: an AI-powered product that uses natural language processing to translate text and speech between languages.
Google Cloud Vision: an AI-powered product that provides image analysis and recognition services to developers.
Google Cloud Speech-to-Text: an AI-powered product that converts audio to text in real-time.
Google Cloud Natural Language: an AI-powered product that analyses and understands natural language text.
Google Cloud Translation: an AI-powered product that provides translation services for text, documents, and websites
How Microsoft plans to challenge Google on search
To modernise its Bing search engine and enhance its web browser, Microsoft is leveraging OpenAI's products. Bing will use OpenAI's open language model, which is believed to be more advanced than the one powering ChatGPT. The new Bing is currently available as a preview, allowing users to submit a limited number of questions, with a waitlist for full access, with plans to open it up to millions of users in the coming weeks.
According to CEO Satya Nadella, "This technology will revolutionise virtually every software category."
Microsoft has nothing to lose
In his quest to challenge Google's search monopoly, CEO Satya Nadella has claimed that Microsoft has the advantage of building up from virtually nothing and could potentially win the battle for margins. This is a major threat to Google, which doesn't have the same luxury, as it currently handles a massive 93% of worldwide internet searches, while Microsoft's Bing accounts for just 3%. With everything to gain and little to lose, Nadella believes that the gross margin of search is going to drop forever.
However, the challenge for Microsoft is to shake things up since Alphabet is the dominant leader in the industry, and most people have never used another search engine. While changing people's habits is challenging, investors should remember that it is still very early days for the nascent AI industry, and Alphabet has been investing in AI for at least a decade, giving them an edge in expertise and data.
Furthermore, other companies like Alibaba and Baidu are also working on their chatbots, creating a more competitive market that should help progress technology quickly.
Despite Nadella's willingness to accept demonetisation in search to gain ground on Alphabet, the onus is on Microsoft to carve out its niche and challenge Google's dominance. Even if Google can maintain its leading position, more intense competition from Microsoft and other players could weaken Alphabet's margins
Alphabet’s Bard experiences difficulties
Alphabet was compelled to respond quickly, sooner than it intended, to showcase its own AI advancements in response to the initial success of ChatGPT. The fact that Alphabet has lost over $100 billion in value since the launch of its chatbot named Bard, after it provided inaccurate information in an advertisement, highlights the enormous impact this new technology has on investors.
The incident has had such an impact because Bard was only available to select users before being publicly released in the coming weeks, and it will face its first test as markets assess its performance against ChatGPT.
Just days after the mishap, the Vice President of Google's core search engine, Probhakar Raghavan, warned in an interview with German newspaper Welt am Sonntag that AI-driven chatbots have pitfalls. Raghavan stated that "this kind of artificial intelligence we're talking about right now can sometimes lead to something we call hallucination. This then expresses itself in such a way that a machine provides a convincing but entirely fabricated answer."
Both Microsoft and Alphabet have integrated AI as a core component of their technological edge
In conclusion, Microsoft seems to have a slight advantage compared to Alphabet thanks to its investments in OpenAI although Alphabet remains the clear leader on search and intends to leverage AI capabilities to a broader range of industries.
On my end, I believe Microsoft will manage to gain market share on search with its search engine Bing that will be deeply improved by the power of ChatGPT. However, Alphabet will not give up just yet and fix the various issues they are currently facing with Bard.
And you? What technology do you think will be at the centre of technology discussions? Let me in the comments.
I hope you found this article interesting.
Have a great week!
Isaac
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