There is a big difference between making a profit and optimizing for profit.
Plenty of businesses make a profit - even a healthy profit - while respecting their employees and contributing to their community. Ones which optimize for profit inevitably become evil.
With that you mean that in tech the value extraction has been in the hands of only a few players (which is exactly what you'd expect in a global market with near-perfect competition. To some extent you could say the entire cause of this is that governments allow multinational companies to exist at all).
Value production for the internet was mostly done for free. Both where it comes to end users and the hosting they needed. And yes, sometimes by "wasting investor dollars" (of course investigating new things, wasting dollars, is exactly what investment is supposed to do, that it does that is why investment is allowed).
And ironically this goes multiple steps up the value chain. Users and mods are complaining to reddit that they don't "pay" them enough. Reddit is complaining that Google/FB/even OpenAI at the moment don't "pay" them enough by trying to take in ads directly, and presumably training their own AIs soon on "their" data. Elon Musk is complaining that he's providing data for free (it's even costing him some money, even though not anywhere close to the amount he implies) and not getting the dollars AI companies are attracting with "his (users)" data.
The real value in OpenAI is that Google's position is that they are the arbiter of where users go. Users decide where to put their attention 99% ... and Google 1% (and FB 0.1%, and reddit 0.01%). But OpenAI is a serious threat to Google's 1%, because it can give better answers and therefore will have the perfect, most expensive, place to put ads if things keep going the way they're going.
For Google this is a lose-lose proposition. Either they win, get to keep their position because they get the best Chatbot. However, running this chatbot is much more expensive than Google search (and they will need to restart their revenue optimization with angry shareholders screaming at them. There is no adwordsLLM yet). So they'll need to run a much more expensive internet scrape on a regular basis, and figure out how to run ads on this new platform, just to maintain the position they currently still have. Shareholders don't care, they just want to see Google's dollar amounts go up 20% per year as they did for a decade. And if Google doesn't do this massive investment? Well, they may lose everything.
Funny how apt the old Futurama joke has become "the internet has always been about the free and open exchange of somebody else's ideas".
Futurama meant Napster. But Reddit has exactly this business model. Google has exactly this business model. Twitter ... etc. I bet the tech sector has actually made more money on this than even the most absurd claims of the RIAA say Napster has cost them.
> OpenAI is a serious threat to Google's 1%, because it can give better answers
It does seem to give better answers.
But I don't think that's necessarily indicative of which kind of technology is capable of giving better search results. Google isn't what it was 20 years ago, so I don't think that what Google is now is terribly indicative of what their core technology is capable of being. They've largely allowed their search service to sink into a quagmire of content farms. They occasionally make a vague swipe at dealing with the absolute worst of it, but for the longest time they've had little incentive to put too much effort into it because these same content farms produce a sizable chunk of their ad revenue.
And they won't go down without a fight. I can't imagine it will be that easy for their crown to be wrested away by a chatbot with stratospheric operating costs that's been jerry-rigged into an ersatz search engine that nobody can afford to "reindex" more often than once every couple years. I wouldn't be surprised if a few rounds of proximal policy optimization costs more than it would cost Google to apply some proper attention to their search result quality.
Their service also got destroyed by SEO. Google has been at war with the public for decades. They simply lost. The public literally destroyed their product. Then they needed to increase ads. They are on a runaway train to zero.
> Shareholders don't care, they just want to see Google's dollar amounts go up 20% per year as they did for a decade. And if Google doesn't do this massive investment? Well, they may lose everything.
to “they may stagnate”. Alphabet shareholders are not going to be left with worthless shares because Alphabet still has the ability to earn tens of billions of dollars of profit per year, just shares worth less than they hoped they would be worth. I.e. they might have to be content playing in the market cap of hundreds of billions rather than trillions.
