🤖 The week AI became real
Online revolution + Other stories that matter + Further thoughts
Hello and welcome to the latest edition of Off to Lunch. This edition is free for all subscribers so please enjoy our look at artificial intelligence plus my round-up of the other stories that matter this week and some thought-provoking analysis that caught my eye. There is a slight change to the format of the round-up. Please let me know what you think.
Let’s start with artificial intelligence. This was the week that the hype around new artificial intelligence technology started to evolve into a reality for households and businesses. Until now the excitement around ChatGPT has been confined to the venture capital and tech world, where it features in every conversation I have at the moment. ChatGPT, a chatbot developed by OpenAI, has become the fastest-growing consumer app ever, with more than 100 million users already. But that includes people just testing it out of curiosity. Or people getting it to answer questions that they can then include in an article looking at how great/useless (delete as appropriate) the technology is. Off to Lunch is one of the culprits here, I am afraid (more here).
However, this week we saw that AI technology could revolutionise how we search for information online - and pretty soon. Microsoft and Google both unveiled new online search tools, but with mixed success
Microsoft has already invested around $10 billion into OpenAI and this week announced a new version of its Bing search engine with ChatGPT integrated into it. The new Bing will give answers to searches and queries, not just a list of links, and you will be able to interact with a chatbot to refine your search. You can sign-up to join the waiting-list for the new Bing, and see examples of how it will work, here. If you want to hear more from Microsoft chief executive Satya Nadella on the company’s ambition then check out the interview below. “A race starts today in terms of what you can expect,” he said at the launch event.
AI has also caught the imagination of Bill Gates, Microsoft’s co-founder, who is working with the company and OpenAI on developing the technology…
Meanwhile, Google unveiled plans to integrate AI into its search engine by announcing a new service called Bard. This service is similar to Microsoft’s and has been made available to a collection of testers as part of the next stage of its development.
However, while Microsoft’s announcement went smoothly, Google’s did not. More than $100 billion was wiped off the value of Alphabet, Google’s parent company, following its announcement about Bard. This was partly caused by concern that Microsoft’s technology is about to blow open the search-engine market, a market that has been dominated by Google, building the business into the $1 trillion tech giant it is today. But it was also caused by an error in a promotional video for Bard. In the video Bard is asked: "What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year old about?". According to the answers Bard gave, this includes taking the first images of a planet outside our solar system. But that is not accurate…
This is one of the problems with the fledging AI technology - it confidently states information as factual when it is either incorrect or debatable. (More on that here)
The share price graphs for Microsoft and Alphabet over the last week show how the companies received different reactions to their announcement. Microsoft’s share price is in white and Alphabet is blue. The cliff-edge drop for Alphabet is when the mistake was discovered and Google pulled the promotional video. That drop reflects a loss in value of about $100 billion…
In response to the error, a Google spokesperson said:
“This highlights the importance of a rigorous testing process, something that we’re kicking off this week with our Trusted Tester program. We'll combine external feedback with our own internal testing to make sure Bard's responses meet a high bar for quality, safety, and groundedness in real-world information."
The error highlights that this is early days for the technology and making any predictions about where it goes is foolhardy. Microsoft may have first-mover advantage, but will that matter? Does anyone remember Ask Jeeves or Alta Vista or when Yahoo! led the way? Perhaps Google, or someone else, will benefit from watching others make mistakes.
The hype around AI is almost certainly overdone in the short-term. It’s not long ago that VCs and the tech world were excited about web3, cryptocurrencies, blockchain and the metaverse. Nonetheless, even if the technology goes no further than online search engines, it will disrupt numerous industries. Search engines, after all, are how most of us navigate the internet. More than 90 per cent of internet users turn to a search engine at least once a month according to surveys.
Retail, advertising and the media would all face disruption. For the media, for example, 18 per cent of news read online in 2022 was found via search engines, according to Ofcom (report here). That is the second biggest source behind websites and apps for TV and radio companies (ie the BBC)
For those interested in more on AI I have picked out the following…
For useful tips on how to use ChatGPT and other chatbots effectively, check out this.
A look at how OpenAI poached engineers from Google to help it launch ChatGPT by The Information
The Economist has looked at Google’s extraordinary dominance of online search over the last 20 years. It processes around 100,000 web searches every second and its market share is more than 90 per cent around the world. Until now it has barely been threatened. More here
Right, let’s now look at what else matters this week. I have tried a slightly new format this week by splitting up the round-up. Firstly, we have the news that matters from around the UK and abroad, then we go into thought-provoking news, analysis and developments that I want to share with you…
Other stories that matter this week…
The UK narrowly avoided entering recession in the final three months of the year according to new data from the Office for National Statistics. The economy was flat - showing 0 per cent growth - when any decline would have meant a recession, which is defined as two consecutive quarters of negative growth. Jeremy Hunt, the chancellor, has been out-and-about talking about how this shows the resilience of the UK economy. However, two words of caution. Firstly, the figures for December were miserable - the economy shrank by 0.5 per cent month-on-month as strikes took their toll. Secondly, this is just a “first estimate” of the economic data by the ONS. It is susceptible to upward and downward revisions. Given that the margins here are small, it could eventually emerge that the UK economy actually did contract in the final three months of 2022 and we are already in recession. Remember the double-dip recession of 2012? That never actually happened - the ONS revised up its growth figures a year later (The Times)
On a more optimistic note, start-up businesses in Manchester are flourishing. New figures from the Department for Digital, Culture, Media and Sport show that tech start-ups and scale-ups in Manchester raised £532 million of funding in 2022. That is a record for the city, up 50 per cent year-on-year, and the fastest growth in the UK outside London and the south-east. It is also one of the highest totals for funding in Europe, ahead of other highly-regarded tech hubs like Lisbon, Brussels and Rome (Manchester Evening News)
Sticking with tech and start-ups, the boss of Digital Catapult, a taxpayer-funded body that helps to link promising tech with investors, has said the UK should stop chasing unicorns - companies valued at more than $1 billion - and instead celebrate profitable and sustainable small and medium-sized businesses (The Times)
Michelle Donelan has been appointed the UK’s new secretary of state for science, innovation and technology (Politico)
The boss of AstraZeneca, one of the UK’s most valuable companies, has criticised the “discouraging” tax system in the country, saying that is one of the reasons why the drug-maker decided to build a new factory in Dublin rather than north-west England. His comments make the front page of The Daily Mail, with the paper splashing on the headline: “When will Treasury get the message over tax?” (Daily Mail)
When tech companies cut jobs they get lots of coverage, but 1,900 jobs are also at risk because discount clothing retailer M&Co is closing all its shops (CityAM)
More on job cuts: Disney is cutting 7,000 jobs and plans to make new sequels to Toy Story, Frozen and Zootopia as part of a shake-up. The activist investor Nelson Peltz has dropped his campaign for change at the company after welcoming the move (BBC)
Good news for homeowners with a mortgage - there is a five-year fixed deal available with an interest rate of below 4 per cent with HSBC. This is the first time such a deal has been available since October. However, it is only available for those remortgaging. The average interest rate on a five-year fixed deal is still 5.14 per cent (The Times)
The latest idea to cut costs on HS2 is to reduce the frequency and top speed of the trains. Maybe it should be renamed Medium Speed 2 (The Guardian)
This feels odd. Cornwall Council has paid Virgin Orbit more than £1.2 million. Sir Richard Branson’s company launched a rocket from Newquay last month, but the high-profile event ended in failure. The council has denied it paid Virgin Orbit to launch the rocket from Cornwall and says the payment relates to a commercial agreement regarding licensing and ground operations (CornwallLive)
Really interesting piece on the secret negotiations between the British Museum and the Greek government about whether the Parthenon Marbles should go back to Greece. There are lots of big issues being debated in these talks, including who is actually entitled to historical items and what the UK should do with treasures that came from other countries and were often stolen (Financial Times)
Great Portland Estates, a property company renowned for judging economic cycles correctly, is focusing on refurbishing old office buildings because it thinks there is going to be a shortage of high-quality and green properties (Bloomberg)
John Lewis has split with the advertising agency behind its Christmas adverts (Marketing Week)
Bradford could be the home for a new music school dubbed “Brit school for the North” under proposals submitted to the government and backed by three leading record labels (The Yorkshire Post)
Newcastle United have bought a key plot of land in the city that should allow the football club to expand their stadium (The Athletic)
Ineos billionaire Sir Jim Ratcliffe has hired Goldman Sachs and JP Morgan to help him work on a bid to buy Manchester United (Bloomberg)
Uber posted record results this week, with revenue up 49 per cent to $8.6 billion in the final three months of 2022. The company credits strong taxi bookings and food delivery orders in the UK as one of the reasons for the strong performance. However, it still seems to me - and others I have spoken to on this matter - that it is more difficult to get an Uber taxi in the UK than it was before Covid-19, with longer waiting times and a higher-risk of cancellation (Uber)
Elon Musk reportedly fired a Twitter employee because he is angry that the number of people who see his tweets is dropping (Platformer)
Further thoughts…
Is our obsession with improving productivity all wrong? According to Paul Krugman, the economist, it is. Great piece on why we might be asking the wrong questions about the future of the economy (New York Times)
The woman credited with developing the concept of imposter syndrome - worrying that you don’t belong somewhere, ie your high-flying job - says the idea is now overused and has lost value (The New Yorker)
President Biden raised the prospect of a tax on billionaires this week. But this analysis looks at recent history to suggest that such a tax would mean high-profile companies like Tesla and Pixar wouldn’t exist. This is because Elon Musk and Steve Jobs - their key backers - wouldn’t have had the money to risk funding them. Rishi Sunak reads this newsletter, so this is a particularly notable piece (Faster, Please!)
Oil and gas companies are getting a lot of criticism after posting big increases in annual profits. BP was the latest to do so this week. However, this column argues that those who are frustrated should also be looking at housebuilders, which enjoy consistently high returns on the investment (FT)
Two contrasting pieces on cities. Firstly, The New Yorker looks at how Austin became one of the fastest-growing cities in the US and the world. Its a long piece, and you don’t need to read it all to get the gist, but the key points are that government and business investment has played a vital role, and that some locals are concerned that the city is losing its way because of the influx of people and money (New Yorker) Secondly, Barcelona has the opposite problem. Businesses are leaving and street crime is up (FT)
Another piece on cities - Simon Kuper looks at what we actually want from cities - a mix of 19th-century streets and squares with a 21st-century twist - and how cars and concrete have spoiled that. This analysis will be familiar to those who listened to our podcast interview with Roger Madelin, the man behind the regeneration of King’s Cross in London (FT)
Chelsea have hired the New Zealand rugby union team’s manager for leadership as a consultant. Gilbert Enoka has also served as New Zealand’s mental skills coach. He is credited with introducing a “no dickheads” policy and helping the team to overcome its reputation for choking under pressure (The Telegraph)
Former England rugby coach Sir Clive Woodward has said the drinking at England matches is out-of-control and people are being disrupted by fans getting up-and-down out of their seats to buy alcohol. Twickenham “is turning into the world’s biggest pub”, he writes in his regular column (Daily Mail)
A modern lesson on how to manage a highly-skilled new employee who is struggling to settle in? Insightful piece from The Times’ Matt Dickinson on how Manchester United manager Erik ten Hag has handled Jadon Sancho. Sancho was given time away to train, never ostracised or blamed for his struggles, and is now being encouraged to take the final step himself (The Times)
This seems like a bad idea: John Cleese is bringing back Fawlty Towers for a new series. He says it won’t be on the BBC because the broadcaster is “far too dominated by people who are frightened of offending people” (Daily Mail)
A new trend? Authors are using crowdfunding to publish their book - focusing on selling 1,000 copies for $100 rather than 10,000 for $10 (The Novelleist)
New Yorkers are fiercely debating how and when to tip after the New York magazine published a new etiquette guide that recommends leaving 20 per cent at corner shops and for coffee. A lot of people in New York are not happy about this. Others - including the UK press - are amused. I have linked to the guide and the reaction (New York)(New York Post)
Netflix has started its clampdown on password sharing (Netflix)
Michael Jackson’s estate is working on a deal to sell a 50 per cent stake in his music catalogue. The deal would value the rights to his music at up to $900 million, according to the reports (Variety)
That’s it for this edition. Thanks for reading. If you enjoy Off to Lunch then please share it with others and spread the word. If this newsletter was shared with you then please sign-up below to become a member, get Off to Lunch sent directly to your inbox, attend our forthcoming events and contribute to the work of Off to Lunch
Best
Graham