Thinking About: AI in Big Tech Earning Reports: the Race is On

AI in Big Tech Earning Reports: the Race is On

The hottest tech topic of late has been Artificial Intelligence. You can’t read a news article on tech that doesn’t discuss AI.

For example:

Two weeks ago, the Big Tech companies reported their financial results: Microsoft, Alphabet (Google), Meta (Facebook), and Apple reported strong sales.

• Microsoft said Artificial Intelligence (AI) helped increase sales in the first three months of this year. Azure, Microsoft’s cloud business reported a 30% increase in revenue, up nearly 30%. They exceeded analysts’ expectations for the quarter while announcing over 10,000 layoffs this year.

• Google‘s rival cloud unit posted an operating income for the first time. It has been trailing Microsoft’s Azure for years. It plans to lay off 12,000 this year.

• Meta reported that its investment in artificial intelligence systems for “driving good results” while it has cut 21,000 jobs worldwide.

• Apple‘s second quarter financial results were strong though off 3 percent compared to last year, but had an all-time record in Services. Apple has stood out from other Big Tech companies in not doing major layoffs, except in their retail operations business.

• Amazon, which is in a slightly different tech space than the above four, nearly doubled in size during COVID and reported better-than-expected quarterly results. Yet it leads the pack with 27,000 layoffs.

AI Spending

Nevertheless, AI spending this year by Big Tech is expected to be $20–50B. The only other technology attracting even a fraction of that kind of spending is fusion power. Notable names in fusion investments include Sam Altman of OpenAI, Jeff Bezos, Bill Gates, and Peter Thiel, but even combined, it does not compare to the amount of money invested in AI.

Meanwhile, Google announced a partnership with the software startup Replit, a company that enables code writing using AI. This week’s Google I/O conference announced the ending of the waitlist for Bard, their AI chatbot competitor to ChatGPT. They released their AI chatbot publicly later than Microsoft did, but they’re rushing to catch up. Bard is available in 180 countries with plans for 40 more.

Microsoft’s Copilot software, developed in partnership with OpenAI, competes in the same space. Software developers use it with Microsoft’s popular publicly-available GitHub cloud-based code repository.

Apple has yet to speak much publicly about AI. Sure, they put a Neural Engine inside the iPhone X years ago and were the first to offer an AI-enabled and natural language processing assistant called Siri. But their ecosystem of AppStore developers has provided lots of 3rd-party AI apps. I suspect we will hear more at their tech conference next month, the Apple Worldwide Developers Conference.

The New Holy Grail?

AI is the new technology “holy grail.” Just mentioning “Artificial Intelligence” inclusion in a software suite is akin to tech virtue signaling.

Ironically, Geoffrey Hinton, the “Godfather of AI,” has left Google over AI. He said recent progress in AI has worried him, both for its near-term impacts like misinformation and longer-term fears that AI could be an existential threat to humanity. He had thought smarter-than-human AI was at least 30 years away. He told The New York Times,

“Obviously, I no longer think that.” 

He wants researchers to collaborate rather than race and offered praise for Google’s responsible behavior. However, he now says it’s “hard to see” how bad actors could be prevented from misusing the technology.

Case in point: Bloomberg reported researchers recently uncovered 49 new websites generated by chatbots peddling misinformation and spam. The not-so-obvious implications involve the next step of training AI on large learning models (LLMs) that are fed by information on the Web; misinformation dilutes or pollutes the “pool” and consequently the value of those LLMs. If the next generation of AI training is not human-engineered but AI-engineered, it would not know that it’s being fed misinformation.

Meanwhile, IBM CEO Arvind Krishna told Bloomberg that 7,800 back-office jobs could be replaced with AI in the next five years.

Bill Petro
billpetro.com