Microsoft deal, Apple-Google talks show tech giants need AI help

Earlier this week, Microsoft named artificial intelligence pioneer Mustafa Suleyman as head of its consumer artificial intelligence business and hired most of the staff from his Inflection AI startup. A day earlier, Bloomberg reported that Alphabet Inc.’s Google was in talks to license its Gemini AI engine to Apple.

The moves show that despite spending billions in collaborations, investments and product development, Microsoft and Google are still struggling to figure out how to leverage generative AI. Neither company moved fast enough to launch consumer products that generated revenue and captured market share, and despite their size and power, they remained vulnerable to disruption.

While engineers work to perfect the large language models that underpin the technology, the companies are forming alliances and scouring the world for talent and promising startups.

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To lead in generative AI, each tech giant needs to combine a variety of ingredients — computing power, top-notch AI models, products that are trustworthy and easy to use, and a way to get those products to people. No single tech giant has all the elements. Google was once a pioneer in large-scale language models, but it continues to release products with worrying bugs and biases. Microsoft had a head start with exclusive access to many of OpenAI’s groundbreaking models, but it’s never been good at building exciting consumer products outside of video games.

Apple Inc., years behind in artificial intelligence, is exploring with Baidu Inc. about using the Chinese company’s artificial intelligence technology in devices sold there as it seeks to bolster its capabilities in China, the Wall Street Journal reported on Friday. Sexual Negotiation. On the plus side, Apple sells the most popular smartphones in the world, and its App Store is the distribution platform for millions of apps. The company plans to announce its AI comeback strategy in June.

“Even with the vast resources of large tech companies and cloud providers, they cannot innovate the entire generative AI ecosystem single-handedly,” said Ido Caspi, research analyst at Global X ETFs. “Companies must constantly seek out the best talent and technology to fill gaps in their portfolios.”

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Microsoft CEO Satya Nadella is not satisfied with his team’s efforts to create consumer products, according to two people familiar with the matter. Over the past year, the company has integrated artificial intelligence into its Bing search engine, Windows, Office and other products, creating a variety of digital assistants under the new Copilot brand. However, Bing has made little headway in its competition with search market leader Google, and other products are in development. Although OpenAI gives Microsoft a first-mover advantage, the startup is focusing on the underlying technology rather than developing products for the software giant.

That’s why Nadella hired Suleiman as executive vice president and CEO of Microsoft Artificial Intelligence, as well as Inflection AI co-founder Karén Simonyan as chief scientist of the new division. Nadella wanted someone to unify and oversee product development and believed he found that person in Suleiman, with whom he connected while discussing how to tailor AI for individual users.

“What we really want to do is create a true end-to-end product experience where users experience a seamless, smooth, human-like conversational interaction,” Suleiman said in an interview on Monday. He likens the work to sculpture, saying “art requires you to know the true sweet spot of when a technology is ready, and how to embellish the experience so that it has an essence and character that is familiar, easy to understand and trustworthy. “

Nadella also knows that as artificial intelligence will revolutionize entire industries, even Microsoft’s flagship products won’t be immune to disruption — whether from peers like Google or from startups that haven’t yet been invented. “These companies are so big that they’re going to re-litigate, right?” Nadella said in an interview. “So even the incumbents can’t take that for granted.”

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Nadella’s confidence in Suleiman was not universally shared. While working at Google DeepMind, Suleiman wasn’t focused on consumer products. At Inflection AI, he oversees the development of a chatbot called Pi, which is designed to interact with users in a more human and supportive way. Despite attracting 1 million active daily users, the startup never found a business case. Suleiman is also accused of abusing DeepMind employees. He admitted making mistakes and said he learned from the experience. However, it’s unclear how well he will fit in with Microsoft’s existing team.

The proposed partnership between Google and Apple is still being worked out, so details on exactly how it will work are sparse. But assuming this deal comes to fruition, it could help every company’s AI efforts.

According to people familiar with the matter, Apple has been testing its own large-scale language model, code-named Ajax, since early last year. Some employees have also been experimenting with a basic chatbot called Apple GPT. But Apple’s technology is still inferior to the tools of Google and other rivals, making a partnership look like the better option, people familiar with the matter said. Apple may eventually partner with another company, including OpenAI, or several companies.

Google has been racing to incorporate artificial intelligence into its products, but the company has been concerned that it has been too slow to take advantage of market shifts and has been playing catch-up to Microsoft. Last month, the company removed an image generator amid a wave of criticism over historically inaccurate depictions of race. The deal with Apple would be Google’s most high-profile Gemini partnership to date and could have significant benefits for the company’s artificial intelligence efforts. Apple has more than 2 billion devices in use, which may become home to Google Gemini later this year.

Rolling out Google’s AI tools to as many devices as possible could help them become tools that users turn to instinctively, much like they did with the company’s search engine, creating a virtuous cycle in which programs grow with more User data becomes increasingly clear. Earlier this year, Google struck a deal with Samsung Electronics Co. to integrate its Gemini technology into the South Korean company’s phones, providing a glimpse into how Google is leveraging its relationships with Android device makers in the era of generative artificial intelligence.

Industry observers expect tech companies to continue partnering and investing in startups to enhance their services and avoid disruption. “They need each other, especially in areas like artificial intelligence that require engineering expertise and a lot of computing power,” said Dan Wang, a professor at Columbia Business School who teaches innovation and entrepreneurship. “For big tech companies, it’s a smart way to spread risk.” He added, “No one has really found a killer app yet that people are willing to pay for.”