The Great AI Game: Google and Microsoft's Strategic Battle.

Imagine two big teams, Google and Microsoft, battling it out in a game of AI. The question everyone wants to know is: Who will win? The game is getting fierce, and the strategies they're using are really clever!

At the start of the game, Microsoft made a smart move. They teamed up with OpenAI and added OpenAI’s ChatGPT and a big language model to Bing, Microsoft's search engine. This was like a huge surprise move that turned the search world upside down!

On the other hand, Google is being really careful. Even though Microsoft is a big threat, Google isn't just running around wildly. Instead, they're focusing on cutting down Microsoft's money in key places like the clouds, servers, and business software.

Sundar Pichai, the boss of Google, is right now in the middle of one of the biggest battles of his life. His plan seems smart and careful. Pichai needs to hit Microsoft's main target, stopping them from using all their money earned from the cloud, servers, and business software. It's super important to find ways to cut down Microsoft's earnings in these areas.

?? But wait, their competition and strategy are far from a mere death match. Let's observe and learn how they battle each other and take away valuable lessons.

?? Did you know Microsoft's new browser, Edge, is actually powered by Google?

?? Imagine you're playing a video game where your opponent is using a cheat code. That's kinda how it feels when Microsoft uses the open-source version of Chrome, known as Chromium, for its Edge browser. Google created Chromium to help the open-source community, but despite its early success, Edge faced stiff competition and eventually got adopted by Microsoft itself.

?? Now, let's talk about Microsoft's strategy. Their switch to Chrome isn't just a one-time thing. They've also changed their backend system. Back in 2015, they switched from Windows to Linux for their backend infrastructure, even creating their own Linux version.

They've also stepped back in areas like smartphones, music streaming, Windows 8, smart assistants, and AI. ??

Lets go back to the basics and start from the beginning of their strategy story.

Now delve deeper into the profound integration of corporate entities into our daily lives.

Have you noticed it?

?? Need to wake up early? Use an Apple Alarm on your iPhone.

?? Need to workout? Track it with Apple Watch and power it with Airpods.

?? Text your buddies with iMessage.

??? Video call your fam with Facetime. And don't forget to track your sleep too! ?? But wait, there's more! If you're building a service, consider using Google's servers, compute engines, virtual machines, cloud functions, databases, NATs, VPC networks, and even Google Fiber. Everything is continuously looping customers into their arms.

Despite making some compromises, Microsoft continues to be a formidable player. They value teamwork and concentrate on areas where they can shine. They've made wise decisions, opting to be part of every aspect of our lives instead of trying to control all industries. ??

Even after a major failure and scandal, it's a win because Microsoft has shown resilience and adaptability. Under the leadership of Satya Nadella, they've managed to turn things around.

They've tidied up the mess, closed down sections like their smartphone business, replaced the notorious Windows 8, and swapped Internet Explorer for Edge.

All these moves were aimed at removing any unnecessary weight on the consumer side. This proves that even in the face of big challenges, companies can recover with smart planning and effective leadership.

Microsoft also targeted a growing market: cloud infrastructure. At the time, AWS was the only player on the market, and while they were great, they were also as expensive as iPhones. So, Satya decided to focus his efforts on the budget cloud market. Today, Azure easily outperforms AWS in terms of cost.

In addition, Satya decided to tailor Microsoft’s products to the needs of enterprises. A great example of this is Microsoft’s acquisition of LinkedIn. LinkedIn has become the go to place for recruiters and hiring managers.

? Satya also made the decision to ditch Skype and build a new video conferencing solution just for enterprises: Microsoft Teams.

? Microsoft's strategic diversification, marked by substantial investments in artificial intelligence (AI) and acquisitions such as LinkedIn, signifies a proactive approach.

?LinkedIn, which Microsoft acquired for $26 billion in 2016, is now bigger than their ads business, is pretty much the same size as Xbox (=gaming), and can soon pass Windows ??

not only this

? The Verge describes Microsoft’s Copilot app as similar to OpenAI’s ChatGPT app, however it also includes free access to OpenAI’s latest GPT-4 model, something you have to pay for if you’re using ChatGPT.

?What's more significant, Microsoft's aggressive deployment of AI systems is driven by a strategy of extensive diversification. For instance, advertising forms approximately 80% of Google's total revenue, and it's unclear how to incorporate Large Language Models (LLMs) and ads simultaneously. Microsoft, on the other hand, leverages LLMs in a variety of areas.??

This is why Satya Nadella invested $13 billion into OpenAI initially and quickly recruited Sam Altman and Greg Brockman when OpenAI started experiencing difficulties.

This strategy allows Microsoft to rely on traditional revenue streams and venture into emerging technologies like AI and large language models (LLMs), showcasing their adaptability. In contrast, companies like Google predominantly depend on advertising revenue.

Microsoft's AI investment in ChatGPT owner OpenAI for $10 billion shows their ability to generate revenue. This could help Microsoft grow beyond its main business customers. The fast rise of ChatGPT, with over 100 million users in two months, shows Microsoft's ability to innovate and quickly gain market share.

However, Microsoft's move into mobile technology could bring more regulation. Despite avoiding the spotlight for 25 years, Microsoft's growing influence could change this. Microsoft's CEO, Nadella, might have the final say, given his predecessor's negative comments about the iPhone a decade ago.

Bloomberg reported that Microsoft is in discussions to launch a mobile app store for games to challenge rivals operated by Apple and Google.

This move would leverage Microsoft's growing mobile influence, particularly in light of their involvement in the ongoing lawsuit against Apple and Google.

? Microsoft's ownership extends beyond its product offerings. Its platforms include GitHub,NPM, and Copilot, all owned by Microsoft.

This control enables Microsoft to host their meetings on Teams and host their entire business on Azure, both owned by Microsoft.

Now let's dive into the income sources of Google. Out of Google's revenue, 5% comes from YouTube ads, 11.7% from Google Network ads, and a staggering 58.1% from Google search ads. This means that 80% of its ad revenue comes from search ads alone.

Google holds a commanding 91.8% market share in the search market, leaving no other player even remotely close.

As of last month, Google held a global market share of approximately 92%. On the other hand, Microsoft is a remarkable company that derives its income from various sources. Major revenue sources for Microsoft include cloud services, Microsoft Office, Windows, and even gaming. Microsoft hasn't placed all its bets on a single horse; it has diversified its revenue streams.

Now, let's delve into the AI war between Google and Microsoft. This is a captivating narrative that traces back to the early days of AI.

Teams is now vying to surpass Zoom, and Microsoft is no longer solely a consumer business. Consumer-based revenue now constitutes a small fraction of Microsoft's overall revenue.

?? Last quarter, Microsoft generated $16.5 billion from Productivity and Business Processes, $20.3 billion from Intelligent Cloud, and only $13 billion from consumer-based revenue.

This data shows that Microsoft isn't reliant on consumer revenue anymore. They can target the consumer market more aggressively, but they can't simply revert to their old strategy. If they do, they risk ending up where they were a decade ago.

As a business student, let's dissect this strategy.

?? The key isn't to replicate the success of the iPhone, Chrome, or Facebook. The key is to build upon these successes and improve them. Microsoft is using this approach with Bing as well. Instead of forcing Cortana on people, they've partnered with ChatGPT, which is already working effectively.

By the end of 2021, Microsoft had overtaken Apple to become the world's largest company. However, this wasn't due to any particularly groundbreaking moves. It's the story of the new Microsoft: the steady, reliable giant. ??

The competition between Google and Microsoft is more than just a friendly rivalry, it's intense.

Google Gemini vs Microsoft's ChatGPT: The AI Showdown.

On December 6th, 2023, Google launched Gemini, a powerful AI model. Despite having a huge 91% share in the search market and 4.2 billion users, Google was worried about open AI. ??

ChatGPT, created by OpenAI, has grown rapidly, with about 100 million active users. Google responded by launching Gemini Nano, Gemini Pro, and Gemini Ultra - AI products expected to beat ChatGPT.

However, Google's investment in AI didn't lead to success. Microsoft combined Bing with ChatGPT, allowing the AI to learn faster and attract more users. ??

Microsoft tried to develop Phi-2, a 2.7 billion parameter language model that was originally released in November 2023 under a research-only license. It recently changed to a MIT #opensource license and is now available for commercial use. You can even use it on Hugging Face! ??

Phi-2 was trained on a highly curated dataset, which helped it achieve top performance, outperforming models 25 times larger and even Google’s Gemini Nano.

Google's attempt to compete with Microsoft failed when they launched Google Bard, their AI chatbot. Despite a big announcement, Bard was poorly received, causing Google to lose $100 billion in market value in a single day. This happened because Bard made a factual error in its first demo, showing the need for rigorous testing. Google is addressing this with their Trusted Tester program. ??

Despite this, Google launched Gemini, hailed as the ChatGPT killer. This led to a 5% increase in Google's stock price and a $8 billion gain in market cap.

Gemini includes a broad range of training data, giving it an edge over OpenAI. Google's privacy policy, which uses information to improve services and develop new products, provides Gemini with access to a vast amount of information, exceeding competitors. In today's world, data drives innovation and decision-making across various industries. Google uses data wisely.

The question is what is the Gemini's secret weapon?

Its multimodal nature. Unlike ChatGPT, which was initially built as a language model and later expanded to handle audio and video, Gemini was designed from the ground up to handle all these formats simultaneously.

Google argues that this integrated approach is the future of AI.

This multimodal AI is designed to achieve state-of-the-art performance across numerous tasks. With Google Gemini, we have three models:

?????????? = A large model designed for highly complex tasks, comparable to ChatGPT-4. It's not even available until early 2024.

?????? = A medium model for a wide range of tasks, comparable to ChatGPT-3.5. It's currently available at 'bard.google.com'.

???????? = A small model designed for mobile device tasks, expected to compete with rumored AppleGPT. It's currently available on the Google Pixel 8 Pro.

Overall, benchmark tests indicate that Gemini Ultra has an edge over GPT-4. However, the arrival of GPT-5 could potentially surpass Gemini Ultra.

however Gemini has been delayed multiple times, fueling anticipation among tech enthusiasts.

So, is Google's Gemini really the ChatGPT killer?

The answer might surprise you. While Gemini has impressive capabilities, it's crucial to remember that ChatGPT is still a formidable player in the AI space.

And the race has only just begun. We're in the early stages of understanding and the competition between these two giants promises to be an exciting journey in the world of AI. ??

Let's plunge deeper into a comprehensive examination of their performance in the AI competition and the GPU market. This will allow us to discern future plans and strategies.

?? Generative AI market is booming, with a rapid evolution from virtually nonexistent to a hot market within a year. IoT Analytics analyzed three interconnected markets for generative AI:

?Data center GPUs,

?Foundational models and platforms, and

? Generative AI services.

?? The race for AI dominance is heating up. OpenAI's GPT-4 was trained for about 90 days using 25k NVIDIA's A100 GPUs. But Microsoft and Meta have reportedly purchased 150k H100 GPUs each this year, allowing them to train a GPT-4 class model in just 7 days from scratch.

?? GPUs are now the new oil, driving the AI market forward.

?? Key players in the generative AI market such as Google, OpenAI, Microsoft, and others create foundation models that become the basis for many generative AI applications. The generative AI market will continue to grow and according to estimates will expand by about 5x. ??

?? NVIDIA dominates the data center GPU segment with a 92% market share. Meanwhile, OpenAI and Microsoft hold a combined 69% in the foundational models and platforms market. Services are more fragmented, with Accenture leading at 6%, and Google also holds a 6% share.

??On the other hand, Google's lag in the NVIDIA GPU market can be attributed to the emergence of alternative AI chips from rival chipmakers, such as Google's TPU v5p, which are being marketed as alternatives to NVIDIA's latest GPUs. These alternative chips, including AMD's MI300X, are gaining traction due to their competitive performance and availability, without the long waits associated with NVIDIA's GPUs.

Let's examine the investment firms that demonstrate potential for a long-term run.

??Big tech is in a race to lead the AI revolution. Apple alone has acquired 30+ AI startups over the last decade. Google comes in second with 21 acquisitions, followed by Meta with 18, and Microsoft with 17

?? In the end, Microsoft is no longer trying to constantly score winners product after product because that’s a losers game. What is sustainable though is associating yourself with up and coming winners and just trying to get a small portion of that pie for yourself.

?? This strategy will never yield in slam dunks because the main product it be ChatGPT or Linux will always outshine what you’re doing. But, at the same time, you also won’t end up like Yahoo .

If ChatGPT’s time in the limelight is over, no worries, you have hundreds of other winners that you also

conclusion

Both Google and Microsoft have made significant strides in AI, with each company pushing the boundaries of what's possible. They're not just competing against each other, but also against the clock. Both companies recognize the potential of AI to transform every product across every company, and they're racing to stay ahead of the curve.

It's a brutal scene.

Could this signal the end of a period?

time only answer this question .....

Thank you for reading and dedicating your time to this content. ??