But this investment seems different from all the other ones as Google isn't actually taking over Anthropic. Amazon is an even larger shareholder and I think Anthropic has made a commitment to prioritise AWS. So what is Google trying to do here? Offer Anthropic to GCP customers as yet another option?
Enemy of my enemy? Google and Microsoft have much greater competitive surface area than either of them have with Amazon. It would make sense for G and A to both prop up an alternative to OpenAI. If Google could integrate quality LLMs into their assistant, that would boost their position relative to Apple too.
That would make sense if Google didn't have its own AI offering and research that is supposed to be first rate and a strategic priority of the company.
Of course Google would prefer Anthropic to beat (or at least be competitive with) OpenAI, but only if they can't do it themselves.
Has Google management lost confidence in its own AI capability? Or are there so many leading AI researchers that refuse to work for Google?
To me this looks like Google could be in big trouble.
Google has astronomical sums of cash and so many hands that the left hand often doesn’t know what the hundreds of right hands know. My point is $2B can be considered a side bet to make sure if their own efforts fail there is a serious competitor to open ai to buy or license by finance people without knowledge of how their own internal modeling efforts are going.
>...a side bet to make sure if their own efforts fail there is a serious competitor...
My point is that this is not how a healthy company can think about its most strategic activities. This sort of failure is not something you can hedge against.
It's like Apple hedging against the risk of failing to keep iPhone competitive by investing in some other device maker that might be able to compete with Samsung.
I don’t think it’s anything like that example, google is an advertising conglomerate not an LLM api company. Anthropic is like a camera company when apple first started making phones in your analogy. Going to become a very important feature to be sure, but not a competing device maker.
By failure I don’t mean they can’t make an LLM product, I mean the LLM product doesn’t have majority market share to be used as an ad surface (or other monetization strategy). That’s only partly dependent on their research and modeling efforts. The revenues they could make from an LLM api business are too small to register for them right now, the market share and product work is also important.
I disagree. Google's entire advertising business depends on them being the best at "organising the world's information". (Apple says Google is the best, so it must be true, right? :)
If Google fails to compete in AI, they will lose search and some competitor will siphon off all their advertisig revenue.
This is all coinciding with regulators taking a closer look at all the other ways in which Google protects its search monopoly. You know, the ones that are not so much based on merit.
Google is at risk of losing both its technology leadership and its grip on distribution channels at the same time.
I don’t see the risk at all. Google has a LLM product with much more reach and better monetization than anthropic already. If you think the DOJ is going to break up google or otherwise destroy their market share in search that’s another story altogether, but if they keep it they’ll be well positioned to make a lot of money buying anthropic and getting their models onto their infrastructure and in their channels. It’d be like buying YouTube, which had absolutely nothing to do with needing their video hosting infrastructure but because they were winning market share with their product decisions.
Google probably knows how to do pretty good AI powered replacement search.
It doesn't know how to keep new information flowing into the AI.
If AI replaces the need to visit the original website and everyone just stays on google.com then a great deal of the web will just stop being updated because nobody is reading it and nobody will read it.
That's googles problem. Frankly it's a problem for every company who wants to try and supplant google search with AI.
I was also thinking about that; in that scenario, for example instead of going to amazon.com to search and buy something you would go to a chat app like ChatGPT or Google Bard and you would interreact with Amazon's chat bot to search and buy something. Think about Chinese super app WeChat but on steroids. This is what Elon is probably dreaming about. But before that vision comes true, we firstly need protocols and standards for building chat bots inside super chat apps. If this comes true, super chat apps would be gigantic walled gardens, even worse than Facebook is today. I think the same conflicting thought process was behind Steve Jobs' push for iPhone web apps whereas web apps are more open and free for users to use than native mobile apps but native mobile apps enable more richer and better user experience. Sadly Apple decided to lock iPhone apps inside iOS and App Store.
When first LLMs and ChatGPT came about, I thought it was just another hype but the web, and the web search industry hangs in a balance (Google in particular).
P.S.
>If AI replaces the need to visit the original website and everyone just stays on google.com then a great deal of the web will just stop being updated because nobody is reading it and nobody will read it.
But even today and for a very long time as a matter of fact, you can use RSS for website updates and read them in your RSS reader and yet classic web still didn't fade away.
Google isn't a focused company, they typically run many parallel bets that often competes with each other. See all their chat apps etc. Betting both on an inhouse and an external solution is normal for them.
Name one other example of Google betting on an external solution in a key strategic area where that bet is a minority interest in a company co-owned by a big competitor.
It makes far more sense for Amazon to prop up an OpenAI competitor to secure access to state of the art models for AWS. Amazon doesn't compete on excelling in AI.
AWS and Google Cloud invested in it for exactly the same reason, to enlarge their cloud businesses. Googles previous investment came with a cloud partnership, then AWS also gave them a cloud partnership, and now Google strengthened their cloud partnership to ensure AWS doesn't take it all.
So this bet doesn't have anything to do with AI, it is a competition between AWS and Google cloud. They are competing over who gets to sell shovels in a gold rush.
But Google is very fragmented as I said, what cloud does has little to do with what other parts of Google does. This investment makes sense for cloud so they make it. It is a weakness and a strength of the company, Amazon is much more top down and that leads to other problems.
Money shouldn’t sit around? It should be invested to make more money. Perhaps Google just thought this was a good investment that would likely provide a good return? It wouldn’t be the first time a company did that.
