Tech giants Microsoft, Apple, and Google seek artificial intelligence assistance in recent deals and talks
Earlier this week, Mustafa Suleyman, an artificial intelligence pioneer, was appointed as the head of Microsoft Corp.’s consumer AI division. Additionally, Microsoft hired the majority of the team from Suleyman’s Inflection AI startup. Just a day prior, Bloomberg revealed that Google, a subsidiary of Alphabet Inc., was discussing the possibility of licensing its Gemini AI engine to Apple Inc.
The moves suggest that while billions of dollars are being poured into partnerships, investments and product development, Microsoft and Google are struggling to figure out how to harness generative AI. Neither company is moving fast enough to bring revenue and market share-generating consumer products to market, and despite their size and power, they remain vulnerable to disruption.
While engineers work to improve the big language models behind the technology, companies form alliances and scour the world for talent and promising startups.
Establishing a leadership position in generative AI requires each tech giant to put together different ingredients—computing power, cutting-edge AI models, reliable and easy-to-use products, and ways to make them accessible to people. None of the tech giants have all the ingredients. Google, once a pioneer of major language models, continues to release products with worrying errors and biases. Microsoft got a head start on many of OpenAI’s pioneering designs, but has never been adept at building exciting consumer products beyond video games.
Apple is years behind in artificial intelligence, and to bolster its capabilities in China, the company is in preliminary talks with Baidu Inc. to use the Chinese company’s artificial intelligence technology in devices sold there, the Wall Street Journal reported Friday. On the plus side, Apple sells the world’s most popular smartphone, and its App Store serves as a distribution platform for millions of applications. The company plans to announce its AI comeback strategy in June.
“Even the big tech companies and cloud service providers with their huge resources cannot single-handedly innovate the entire generative AI ecosystem,” said Ido Caspi, research analyst at Global X ETF. “Companies must constantly seek the best talent and technology to fill gaps in their portfolios.”
Microsoft CEO Satya Nadella is not happy with his team’s efforts to create consumer products, according to two people familiar with his thinking. Over the past year, the company has added artificial intelligence to the Bing search engine, Windows, Office and other products — creating a variety of digital assistants under the new Copilot brand. Still, Bing has made few gains against search market leader Google, and other products are a work in progress. While OpenAI has given Microsoft a leg up, the startup is focused on the underlying technology, not the development of the software giant’s products.
That’s why Nadella recruited Suleyman as vice president and general manager of Microsoft AI, along with Inflection AI founder Karén Simonyan, who will become the lead researcher of the new unit. Nadella wanted someone to unify and oversee product development, and believes he found that person in Suleyman, whom he met during discussions about how AI could be tailored to individual users.
“We’re really trying to create a real end-to-end product experience so that the user feels that the conversation is seamless, smooth and human,” Suleyman said in an interview Monday. He compared the work to sculpture, saying that “art requires you to know the real sweet spot of when the technology is ready, and how to clothe the experience so that it has a familiar, accessible and trusted essence and character.”
Nadella also knows that with AI completely changing the industry, even Microsoft’s flagship products aren’t immune to disruption — whether it’s from a partner like Google or a startup that hasn’t even been invented yet. “These companies are big, and they’re all going to get sued again, right?” Nadella said in an interview. “So even the incumbents can’t take it for granted.”
Nadella’s faith in Suleyman is not universally shared. During his time at Google’s DeepMind, Suleyman did not focus on consumer products. At Inflection AI, he oversaw the development of a chatbot called Pi, designed to interact with users in a more human and supportive way. However, despite a million active daily users, the startup could not find business. Suleyman was also accused of mistreating DeepMind employees. He has admitted that he made mistakes and says he learned from the experience. Still, it’s unclear how well he’ll mesh with Microsoft’s current team.
The proposed partnership between Google and Apple is still in development, so there are few details on exactly how it would work. But assuming the deal goes through, it could help every company in its AI endeavors.
Since early last year, Apple has been testing its own major language model, codenamed Ajax, according to people familiar with the situation. Some employees have also tried a basic chatbot called Apple GPT. But Apple’s technology is still inferior to tools from Google and other competitors, the people said, so a partnership seems like a better option. Apple could ultimately partner with another company, including OpenAI or several.
Google has made efforts to integrate artificial intelligence into its products, but the company has been concerned that it has been too slow to take advantage of the market shift, and the company has been trying to catch up with Microsoft. Last month, the company launched the image generator amid a barrage of criticism for inaccurate historical depictions of race. A deal with Apple would be Google’s most significant partnership with Gemini to date and could be a major boon to the company’s AI efforts. Apple has more than 2 billion devices in active use, which may become the home of Google Gemini later this year.
Pushing Google’s AI tools into as many devices as possible could help make them the kind that users turn to reflexively, as with the company’s search engine. This creates a beneficial cycle where the programs become even sharper with additional user data. Earlier this year, Google struck a deal with Samsung Electronics Co. to include Gemini technology in the South Korean company’s phones, offering a taste of how Google might leverage its relationships with Android device makers in the age of generative artificial intelligence.
Industry watchers expect tech companies to continue to collaborate and invest in startups to improve their services and avoid disruption. “They need each other, especially in a space like artificial intelligence, which requires technical expertise and a lot of computing power,” said Dan Wang, a Columbia Business School professor who teaches innovation and entrepreneurship. “It’s a sensible way for large technology companies to spread risk.” He added that no one has yet found a killer app that people are willing to pay for.
