Reuters World News - Part 1: It's Google's 25th birthday - but what lies ahead for Big Tech?

Episode Date: September 30, 2023

Our two-part weekend series digs into three factors that will shape the future of Big Tech: innovation, pushback from regulators and the immigration policy that affects the talent race.  Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit megaphone.fm/adchoices to opt out of targeted advertising. Learn more about your ad choices. Visit megaphone.fm/adchoices

Google celebrated its 25th birthday this week with a surprise doodle and an Easter egg on the homepage. What started out as a search engine invented by two friends from Stanford is now a giant tech company called Alphabet. Its $1.7 trillion market cap makes it the third largest company in the world behind Apple and Microsoft, with Amazon, Tesla, and Meta not far off its tail. This weekend, we ponder what comes next for big tech with business reporters, on the West Coast and in D.C. As AI and new darlings like Invidia soar, we dig into three factors that will shape the future

of these industry giants. Innovation, pushback from regulators, and the immigration policy that affects the talent race. I'm Christopher Waljasper in Chicago. I'm Diane Barts in Washington, D.C. I'm Katie Paul in Menlo Park, California. And I'm Stephen Nellis in San Francisco.

We start with my colleagues, Stephen Nellis, who's been covering the tech industry for more than 15 years. Stephen, take us back to 1998, the year Google was born. It's hard to imagine now what life was like before 2000. Only half of Americans had the internet, and for a bunch of those folks, it actually connected over an old school phone line. People of a certain age will remember the strange sound of a computer connecting over a phone line. And those lines took hours to do something like download.

a song that takes maybe a few seconds at most right now. And it was a world that just was far less connected. You kind of quit working when you left work and started working again when you got there, even if you were a white collar or managerial kind of person. And information didn't follow you around everywhere forever and ever the way that it does today. Okay. So now we have these big tech companies dominating our lives. Apple, Google, Facebook, Amazon, but it feels like we're on the verge of a shift. What do the next 25 years look like for these tech giants? So first off, you're absolutely right that we're at a very profound inflection point right now, and that inflection point is called artificial intelligence. So a lot of people just think of this as, oh, hey, I can go chat with a computer. And that's one aspect of it. But what's really profound here is the ability for computers to understand natural human language,

and for humans to therefore interact with those computers in their own human language. If you think about how we've used computers for the past 50 years or so, we've always had to use some kind of abstraction. So that could be coding in the early days. But it could also be things like using a pointer and a mouse or tapping on the screen was a massive innovation with Apple iPhones and iPads because it was much more intuitive than typing on this cordy keyboard, which makes no sense. at all in the modern age,

where moving around this thing called the mouse, why is it even called the mouse? And so I think that people really, really need to think about AI as a profound change in how we interact with computers, because now you can just talk to them, right? And you've always been able to talk to them and have them say something back, but they will understand you now. So that is a big change.

The question becomes, how is the tech industry going to change because of it? So in other eras, like the beginning of the PC era in the late 70s and early 80s or the beginning of the internet era in the 1990s, we saw huge companies topple. So companies like IBM were unshakable giants in the 70s and basically got knocked off that throne in the PC revolution in the 1980s. Similarly in the 90s, I think media corporations are a great example of this that really got knocked off an economic pedestal by the revolution in internet technology. So the question is, what is the impact going to be with artificial intelligence? And it's a very open one right now.

There are a lot of startups that are trying new things. But the one thing we've found about artificial intelligence is that it actually has some properties that make it very amenable to being pursued by very large companies. Namely, it's really, really expensive. So that shop, out that you're talking to and having fun with behind the scenes is actually tens of thousands of chips that cost tens of thousands of dollars each. So you've got these multi-billion dollar data centers that are grinding away to deliver that fun little chat with you. That really favors companies that have a lot of capital and have a lot of people to program those computers. So one of the things that I think governments around the world are looking

at is, is this technology inflection point going to be one where there can really be a lot of innovation, where that innovation be constrained by the fact that there's very large companies that are very powerful and that are best positioned to kind of exploit these technologies? It's still an open question, but I think when you see the headlines about Amazon up for an antitrust suit with the FTC, Google, there's still some antitrust actions going on company to company between Apple and Epic Games, that's what these questions are really about. Is this going to be a moment when new giants are born and old giants fall, or will the old giants sort of absorb all the innovation and keep it within their own walls? While innovation is key to the survival of

these tech giants, history is littered with failures. For every Alexa or Facebook, there's a Betamax or Google Glass, innovations that nearly take off, but then fall by the wayside. So we have a lot of exciting stuff that we're going to talk about today. Meta, the owner of Facebook, Instagram, WhatsApp, held its annual developers conference this week. The big reveal by founder Mark Zuckerberg was its consumer-facing chatbot assistance, featuring celebrities like Snoop Dog. I mean, who hasn't wanted to play a text, you know, adventure game? with Snoop Doc.

Our tech reporter, Katie Paul, was in Menlo Park. Katie, Zuckerberg took a big swing in 2021 with the Metaverse. But it doesn't seem to have gone anywhere. Now he's introducing these chatbot assistants. But we've already got things like Alexa, Siri, chat GPT. We're already talking to computers. Was this really anything new? So it's new for Meta.

These are Meta's first consumer. Facing AI products. You know, the company's been doing a bunch of research for a long time. They've rolled out a mostly open source model, but they haven't actually presented this to consumers to be used on Facebook, on Instagram, on WhatsApp in their apps yet. And sure, chat GPT is out there. That's generative. But this is the first time that a lot of people will be able to access these kinds of tools in apps that are already very much integrated in. into their lives. And the silly celebrity chatbots aside, the assistant that you interact with, you can interact in text, like as a chatbot. You can tell it to generate images. And then also,

if you're using one of Meta's devices like their smart glasses or their Quest 3 mixed reality headset, you can talk with it as well. Now, this harkens back to Google Glasses, which were kind of a dud. Is there really new innovation here? Well, time will tell. I mean, there are sales to date on the Raybans. We don't know the exact figures, but, you know, with independent estimates and what's leaked from the company, it doesn't look great. There's still a question of whether people are going to be comfortable wearing all this tech on their face. There are concerns around being able to record the things around you all the time. There's a creepy factor to that. Now, it feels like many of the tech giants are trying to wow us in these presentations similar to what we saw in the early 2000s, but they're just really lacking the same momentum. Why do you think that is? Well, to a large degree, these are maturing businesses, right? These are businesses that came about 15, 20 years ago. And they had really innovative ideas at the time. And we've written that. wave and they've grown up into these huge behemoth companies. And so it's just a different era in their development. I mean, there's only so much more you can grow when you're that big already.

So they do have to find new concepts, new ways of getting people engaged and keeping them, you know, finding new users and keeping the ones who are there engaged in keeping things fresh. For its 25th birthday, Google got a gift from federal regulators, an antitrust lawsuit. It joins the likes of Facebook, Apple, and just this week, Amazon, in being scrutinized by the Federal Trade Commission or the Justice Department. What happens in these cases could shape the future of tech innovation. So I called up our antitrust reporter, Diane Barts, to help us understand what's at stake. Now, Diane, these are obviously very large companies, but they still have competition, right?

I mean, Amazon has other online retailers, Facebook isn't the only social media platform, and you could use Bing instead of Google. Are they really monopolies? Okay, so let's take that last one first. Everybody uses a search engine. So let me ask you this. How many people use Bing or how many people use Duck.como? The Justice Department in its complaint against Google

says that Google has 90% of the search market. And honestly, I'm surprised that the number is that low. That says something about Google's enormous market power and search. Facebook. I mean, yeah, you're right. There's Twitter, but it's a giant in social media. Also, it owns WhatsApp and Instagram. Amazon.com. Walmart has an online presence, but Amazon's got like over 60 and maybe 70% of online retail sales. These are giant companies. So if any of these companies lose these lawsuits, could they be forced to sell off or split apart? Similar to some of the other antitrust cases we've seen in history?

I mean, I suppose we're a long way from that. In antitrust trials, what happens is first there's what they call a liability phase, where a judge or a jury has to figure out if the company broke the law. And if they did break the law, then there'll be an argument over remedy. I anticipate if the remedy is a tough one, like, you know, selling a really valid. valuable subsidiary, like Instagram, or breaking up the company, that it would go all the way to the Supreme Court, and we will all be in the nursing home by the time it's resolved. These big tech companies are pushing forward into areas like artificial intelligence,

where we really don't have a firm legal framework. How does that impact future innovation? So, AI has come up because there's concern that the companies that we're talking about are going to have the money and the technology to become also the leaders in AI. And I think part of what the government's looking to do is trying to level that playing field so maybe another company can rise. I mean, when the government sued Microsoft in the late 90s and there was a trial and an appeal and a settlement. And one of the effects was that Microsoft changed some of its business practices. And that meant that companies like Google had space to grow where maybe if Microsoft had continued as

the powerful company that it really was at the time, and it's still powerful, that there wouldn't have been space for Google. Tomorrow, we'll delve into the role of immigration in tech innovation and how the future of both are intertwined. I know there's a lot of skepticism in the United States right now, but this notion of the United States is a city on a hill where people around the world set their sights to make a better life. That's still very true in Silicon Valley. And of course, we'll be back on Monday with our 10-minute daily news show. Thanks to Stephen Nellis, Katie Paul, Diane Barts, and all our tech reporters for

their coverage. To make sure you know what's going on in the world, listen in for 10 minutes every weekday. And don't forget to subscribe on your favorite podcast player or download the Reuters app.