ARK Invest, led by Cathie Wood, poses a significant question:
Can Apple and Google deliver advanced AI features with their current approaches? Despite being at the forefront of the tech industry, these giants are under mounting pressure to utilize artificial intelligence (AI) to maintain their market leadership. ARK’s chief futurist, Brett Winton, explored this topic in a recent report.
AI’s Disruptive Potential and Cost Reductions
According to Winton, AI is revolutionizing the market with its unprecedented cost reductions. He highlights three core aspects of disruptive technologies. Steep declines in costs, expansion into underserved markets, and business models that may seem unprofitable initially but show long-term value.
This type of disruption opens opportunities for smaller companies to compete with industry leaders. Even though Big Tech acknowledges AI’s transformative impact. Winton points out that AI’s cost to operate high-performance models is halving every four months. This trend is expected to continue throughout the 2020s.
Winton compares AI’s rapid cost decline to Moore’s Law, which states that semiconductor costs halve every 18 to 24 months. AI, however, is advancing at a rate four to six times faster.
Big Tech’s Approach: Let Startups Test AI First
Winton notes that major companies like Apple and Google often wait for startups to take on the risks of new technology before they adopt it at scale. For example, Google didn’t launch its large language model until three years after OpenAI entered the market. Even then, Google’s performance lagged behind OpenAI, with customers experiencing 40% higher costs for comparable performance by early 2023.
Why Apple and Google Are Taking a Cautious Approach to AI
While Google trails behind OpenAI, Apple has yet to launch a large language model. Its first AI-driven products are anticipated in late 2024. However, Winton argues that moving cautiously doesn’t necessarily mean they will lose out. Both companies are cautious about releasing products that could be unpredictable or fail to meet high standards. As they are committed to protecting their carefully crafted reputations.
Still, Winton questions if this measured approach will allow Apple and Google to develop AI systems that meet the growing demand for performance. He concludes that while these tech giants may prefer less disruptive technologies, AI’s transformative power will eventually force them to adapt or risk falling behind.
Conclusion
As AI technology continues to accelerate, Apple and Google face the challenge of balancing their need for innovation with protecting their reputations. According to Brett Winton from ARK Invest, while their strategies may currently focus on reducing risk. The rapid decline in AI costs and its disruptive nature will require them to adapt in order to remain competitive in a rapidly changing market.
