Sport of Kings: Microsoft's OpenAI vendetta against Google
In the tech world, "Free" is the the real F-word ...
An eye for an eye, a tooth for a tooth, a hand for a hand - Exodus 21:24 (KJV)
The Japanese strategy Game of Go is exceptionally hard to master for a westerner. To win at Go, one must beat the opponent by outflanking them and seizing their territory. Opponents in Go snake around each other, laying traps as they edge in and out of invisible areas on the board, often hitting the edges and winding back in, with the winner eventually trapping enemy stones and sucking the life out of their territories. Watching what’s happening between Microsoft and Google, Satya Nadella is surely a Go master.
Microsoft is the original tech apex predator of our epoch, marauding through 1980s and 1990s, destroying their competition through hegemony and assimilation. They basically sold one thing - an operating system, adding each of their competitors’ products as “free” features to that one product. Java Virtual Machine? No problem, free. Digital Rights Management? No problem, free. Database? No problem,… you get the idea. Ten years of government antitrust action, and patent wars at the hands of the various victims, reined Microsoft’s more egregious tactics in, but no amount of regulatory enforcement, short of an AT&T style breakup can change corporate DNA.
Google rose from the ashes of dot com. Based on an algorithm that helped people find stuff on the Internet, kissed by Sand Hill Road Princes Charming. With Eric Schmidt as the institutionalizer, a search algorithm turned into brain-sucking data leviathan that translated a search algorithm into an advertising machine. To feed Google’s insatiable hunger for behavioral information, the company added “sensors” like mail, maps, video, etc. that they gave to consumers for free. Like a huge digital keychain jingling in front of a few billion babies, Google probed human behavior like no other entity in history, building an empire on data - primarily via search and AI. They are a cyclops - seeing all with one huge AI enabled eye.
Google’s master play was to develop the mobile operating system Android and give it away for “free” to phone makers. The Faustian Gamble for the Samsungs and HTCs of the world was “take this free sword and use it to kill Apple, but place this data collector around your customers’ necks”. Not a bad deal if you’re selling plastic and silicon. The downside for the companies that took the Android drug was that they became commodities in Google land. Whether intended or not, unfortunately for Microsoft, this hit their primary source of revenue expansion - Windows for the Mobile space.
Upon taking on the CEO position, Nadella, the creator of Azure, judo flipped the entire Microsoft product line into a cloud-based system. This modernized the product line, deprecated the standalone operating system into an access point, and created a subscription business for Microsoft’s big money apps (Office, Outlook, etc), and it leveraged Microsoft’s massive legions of highly skilled sales and marketing people to sell Cloud. In the short term, this drew a massive defensive line against Google’s attacks on enterprise productivity tools, but it also created a broad beachhead for a counterattack against Google (and Amazon).
Now to the OpenAI maneuver. Riddle yourself this: Who’s missing in this odd list of Silicon Valley cognoscenti: three of the PayPal Brotherhood (Thiel, Musk, Hoffman), AWS and Microsoft? And why would they invest in open artificial intelligence? Answer: it’s a Google killer.
Google’s entire business is driven by sophisticated AI that profiles everything under the sun. Open the brains behind this and you give the gift of fire to anyone who wants to make a little Google of their own. Microsoft is now doubling down, investing big bucks and incorporating OpenAI’s tools into their services, while flooding the streets with it at the same time. Payback for a free operating system for mobiles and rocket fuel for Azure, Bing, etc. The next act in the opera is free maps - a similar coalition recently launched The Overture Map Foundation (OMF) to create an open maps platform. This blocks Google’s march into cars, drones, etc. It’s clear that the combo of OMF and OpenAI hands critical weapons to car makers who would otherwise turn to Android (Volvo for example) turning their electric cars into Samsung Galaxy S3’s with wheels; map intelligence is key to the success of such platforms.
The amazing thing about this phase of internecine warfare between tech giants is not that they’re trying kill each other. That’s what they’re supposed to do. Rather, it’s that they’re hunting cooperatively like packs of T-Rex’s. To those who dueled with the Microsoft Borg Ship in the 90s and early 2000s, it’s shocking that they’re not only working with others but that they’re leveraging open source mechanisms to do so. Once upon a time, Linux was poison to Microsoft’s monopoly - and Linux and BSD Unix in fact did a lot of damage to Windows. But, through a baptism of fire, Microsoft returns with a new platform, a mastery of open source tactics, finally having assimilated open source software into their playbook.
Google's “code red” problem is not being poked in the eye. It’s being blinded by a million instances of free AI, everywhere. It’s not that they lack the inventions to match OpenAI, it’s that they’ve missed a turn in the game. Their next move is going to be intriguing to watch.
As they say in Go - Atari (当たり)!