Technology Artificial Intelligence Business

Supremacy: AI, ChatGPT, and the Race that Will Change the World (Summary)

by Parmy Olson

In 2017, researchers at Google published a groundbreaking paper for a new AI architecture they called the 'transformer.' Then they watched in horror as their own company, paralyzed by caution, allowed a small startup called OpenAI to take their invention, plug it into Microsoft's supercomputers, and build ChatGPTā€”the product that would upend Google's dominance and trigger a 'code red' panic inside the world's most powerful tech giant.

Google Gave Away the Crown Jewels

The foundational technology behind ChatGPT, the 'transformer,' was created inside Google. But the company's academic, open-publishing culture meant they gave their revolutionary blueprint to the world, which competitors then used to outmaneuver them.

The 2017 paper 'Attention Is All You Need,' published by Google Brain researchers, became the foundational text for the entire generative AI boom. Ironically, many of the paper's authors would later leave Google to found their own AI startups, using their own invention to compete against their former employer.

The Innovator's Dilemma Paralyzed a Giant

The public launch of ChatGPT in late 2022 was a seismic shock for Google. Despite having arguably more advanced technology in its labs, the company was caught flat-footed by OpenAI's bold, public-facing product, triggering a frantic scramble to catch up.

Google had been testing its own powerful chatbot, LaMDA, for years but was hesitant to release it due to fears of 'reputational risk.' When ChatGPT went viral, Google's leadership rushed out its competitor, Bard, resulting in a fumbled demo that wiped $100 billion off the company's stock value in a single day.

Microsoft's Trillion-Dollar Bet on an Underdog

While OpenAI had brilliant researchers, they lacked the one resource essential for building powerful AI: massive, expensive computing power. Microsoft's risky, multi-billion dollar investment gave them the keys to a kingdom of supercomputers, allowing them to leapfrog the competition.

To get the thousands of GPUs they desperately needed, OpenAI essentially gave Microsoft an exclusive license to their core technology. CEO Satya Nadella invested $1 billion in 2019, followed by another $10 billion, a move that integrated OpenAI's tech into Bing and Microsoft 365, stunning a complacent Google.

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