(GOOGL), (AAPL), (META), (TSLA)
You know, back when I was interviewing Japan's Prime Minister Takeo Fukuda in the late '70s, I never imagined I'd be more excited about artificial intelligence than international politics. Yet here we are.
The world of technology has a funny way of shifting our focus, and AI is the latest game-changer that's got my attention.
As it turns out, the Turing test was just the warm-up. We're now in a whole new ballgame, and some of the biggest players are struggling to keep up.
Remember when Google (GOOGL) was the coolest kid on the block? Well, they've been caught with their pants down. It took them a whopping 30 months after GPT-3 hit the scene to roll out their own AI system.
And Apple (AAPL)? They didn't even mention AI at their 2023 developer conference. Talk about missing the boat.
Over the past months, the big boys have finally started waking up and smelling the coffee. But here's the million-dollar question: Is it too little, too late? Can these tech giants simply slap some AI on their existing products and call it a day? Not so fast, my friends.
Let's break it down and see if AI truly fits the bill of a disruptive technology. Spoiler alert: It does, and then some.
First up, we've got cost declines that would make Moore's Law blush. AI is getting cheaper by the minute. We're talking about costs halving every 4 months. That's 4-6 times faster than the semiconductor space.
In other words, what used to take a decade in traditional tech is now happening in less than 2 years with AI.
Just look at the numbers: Back in 2020, training a GPT-4 sized model would've set you back a cool $6 billion.
But at the rate this tech is evolving, the same AI power that would've cost you billions 4 years ago will be running on your smartphone by 2026.
As expected, this rapid cost decline is giving the big tech companies a serious case of whiplash. Even small delays in getting to market are creating performance gaps wider than the Grand Canyon.
In fact, Google's been playing catch-up, and their customers have been paying the price - literally.
Since early 2023, using Google's top model instead of OpenAI's best offering would've cost you 40%+ more for the same performance. Ouch.
But here's where it gets more interesting. AI isn't content staying in its lane. We're seeing AI pop up everywhere from healthcare to finance, and even in industries you wouldn't expect.
Just look at the earnings calls - everyone and their dog is talking about AI these days.
Now, you might think the tech giants have this in the bag. After all, Google's massive search data gives them an unbeatable advantage. Think again.
Those short, repetitive search queries aren't exactly prime material for training natural language systems.
Meanwhile, social media giants like Meta (META) and even X (formerly Twitter) are sitting on goldmines of rich, conversational data.
And let's not forget about the world beyond keyboards and screens. Companies like Tesla (TSLA) are collecting real-world data at a mind-boggling scale.
We're talking about 80 quadrillion tokens of driving data in the last year alone. By the end of the decade, that could balloon to over 300 quadrillion tokens per year.
That's the kind of data that could make language models look like child's play.
That’s not where it ends though. AI isn't content with disrupting existing industries. If anything, this tech has been spawning entirely new ones. It's like a breeding ground for innovation. Actually, venture capitalists have been throwing money at AI startups like there's no tomorrow.
We're seeing about a third of global venture funding - that's over $90 billion - going to AI companies this year alone.
So, what does all this mean for the tech giants? Well, they're in a bit of a pickle.
They can't afford to incorporate AI disruptively without risking their cash cows. That’s like trying to change the engine of a plane while it's still flying.
As a result, they're likely to water down AI's magic, creating opportunities for nimble startups to swoop in and steal the show.
I'm not saying Google and Apple are doomed just yet—they might still have a trick or two up their sleeve.
But let’s face it, these giants would rather take a more cautious, controlled approach. Unfortunately for them, the AI revolution isn’t waiting around. It’s barreling ahead at full speed, and it’s not slowing down for anybody.
