The Catch-Up Plan

The tech industry is quickly morphing into a "generative artificial intelligence success story or bust" outcome for many involved.

This came pretty much out of nowhere.

December 2022 was the big announcement that ChatGPT went live and everybody in tech has basically been freaking out since then.

Big ideas like the internet and software also had the same type of effect on tech stocks back in the heyday.

What would have Microsoft (MSFT) been without the computer or Windows?

Even more urgent, once-perceived growth tech companies like Tesla are starting to cut prices of products because the consumer is tapped out these days.

That means tech corporations can’t sell the current product by adding incremental iterations and passing it off as something “groundbreaking.”

Consumers need something more.

Consumers will spend on the next big thing and generative artificial intelligence still has a long way to go, but stocks participating in generative AI are starting to get those premium multiples that were only reserved for tech royalty.

Everyone is hoping to get in on the action, and Alphabet is also racing to build a new search engine and add artificial intelligence features to its existing products in the face of rapid growth in the field by rivals such as Microsoft Bing.

Google is testing new features called "Magi," with more than 160 people working full-time on the project.

Google's new products will try to predict users' needs, with features such as helping users write software code and display ads in search results, and Google is also exploring mapping technology that allows users to use Google Earth with the help of AI and search music through conversations with chatbots.

Samsung Electronics is reportedly considering replacing Google with Bing, the main search engine on its phones, because of Bing's artificial intelligence capabilities. The Samsung contract is expected to generate $3 billion in annual revenue for Google, a revenue stream that is now in jeopardy. In addition, Google has a $20 billion contract with Apple for a similar default search engine, which is up for renewal this year.

Google’s search engine could be swept into the dustbin of history if they don’t get a move on it pronto.

The ecosystems like Apple and Samsung can easily opt for a better engine if Google falls behind and that is exactly what we are seeing from Samsung.

I would probably say that Google got a little too cocky and stopped developing itself.

They thought that nobody could topple them.

The panoramic views from the ivory tower can look nice from the terrace for a while until somebody builds a bigger ivory tower that obstructs the view.  

It’s been quite fascinating to see Google’s sense of urgency lately because it was always assumed they were part of a stable duopoly with Facebook.

Google’s panic indicates that Microsoft’s Bing is a real threat to their revenue stream, and at the very minimum, bits and pieces of the new technology will be incorporated into a new version of a search engine that will behave as a supercharged version of Google, the likes we have never seen before.

If Google can catch up, then its stock price will go a lot higher from here.