Saturday, 19 September 2020

Amazon is Becoming a Hardware Giant while Google Is Developing AI-As-A-Service

Amazon recently rolled out a slew of new hardware and Alexa integrated products. A smart microwave and a subwoofer are just some of the new things Amazon unveiled at its September 2018 event.

The truth is Google, Amazon and Alibaba are changing the world in 2018 with smart speakers in our homes. This is a battle for the next era of the attention economy, and it’s not about apps. It’s about even more intimate personal data.

Amazon discovered Alexa isn’t a shopping channel quite yet, as Google and Alibaba made huge strides in 2018 to catch up in the race to the personal assistant of everything.

Google’s smart display that will launch soon will be a huge win for YouTube’s gaining popularity. While Amazon Prime Video and Twitch are growing, they are nothing quite like YouTube or Netflix just yet.

CNBC insists that Amazon and Google both want to run your home, but for totally different reasons. It essentially boils down to consumer fulfillment and convenience (Amazon) vs. personalized Ads and AI-as-a-service (Google). We know Google has a huge lead in advertising-centric revenue but Amazon leads in the Cloud and in E-commerce.

It’s hands down, the most exciting battle for the future of tech to watch.
Google might be incredibly profitable but that’s because it owns a duopoly of all advertising and search. Google excels at partnerships, not necessarily innovation. While I believe Waymo will be the leader in the advent of autonomous vehicles, there are many players in that story.

Amazon has a greater probability of investing in things like healthcare, banking and customer-centric services that can scale over time. Even if Google’s data on consumers is more granular, Amazon’s data is potentially more valuable with a golden gateway that is Prime.

With Amazon likely scaling AmazonGo to 3,000 locations in the next three years, and Amazon being the 2nd company after Apple to hit a $1 Trillion market cap valuation, Amazon appears destined for great things. But the kinds of services Google Home might afford me appear to be leading Alexa’s hugely interesting ecosystem of Alexa Skills. Even Alexa has lost some of its lustre in 2018 with Google Home and Google Home Mini sales exploding.

As Amazon has successfully pivoted into entertainment, Google’s (Alphabet’s) sheer utility of Android, Chrome, Google Maps and search still remains one of the most exciting companies in the world with DeepMind. Realistically it’s difficult to keep up with what either company is doing.

Amazon can release 15 new hardware products and we expect that. But how quickly Google’s personal assistant is getting smarter, it’s hard for us to even anticipate that. The Google Duplex demo certainly did raise some eyebrows. Google’s pace of language localization with Google Assistant is downright shocking. You want ubiquity, here are two companies that won’t just be around in fifty years, they will both have a sizable impact on the future of technology in general. Google might have a corner in my smart home but Amazon is more likely to rule my life in ten years. The key difference is I trust Amazon with my data, whereas with Alphabet I do not.

It’s not just that Amazon builds and Google partners, its that with Google I am the product. With Amazon fulfillment means being customer-centric. Two very different ideologies. Google is okay supporting autonomous weapons, moving into censorship products in China and not being able to censor YouTube or the dark alleys its algorithms lead us or our children into. Alphabet’s actions and words aren’t in sync. Its internal conflicts are imploding in a leadership morality vacuum. Even if it has more of the AI talent of the world than any other company, it has serious issues to deal with.

Amazon however is the more aggressive company, with dubious worker treatment issues and many E-commerce warehouse and delivery workers working on food stamps. No company better shows the problem of underemployment and how underemployment is the new unemployment than Amazon. A quick look at average salaries for its employees shows an underlying problem of automation’s impact on the future of work for all of us.

Amazon has had significant success in hardware stemming back to 2007, while Google was designed to scale into AI-as-a-service right from the beginning. Both show hype, big budgets and mercurial leaders whose true motivations are difficult to pin down. Google is that company we once wanted to work for, but Amazon is that company consumers trust.

                                                                      Amazon sells you stuff, Google sells you. (CNBC)

In 2019 this is going to start to be a problem for Alphabet’s reputation. The Ad-revenue business model will fall back to harder margins especially as Amazon enters the turf of Facebook and Google in advertising and its dubious future.

In 2022, we might be ordering our groceries from Amazon, finding certain data on Facebook, and learning about the world and ourselves via Google. We can certainly argue it will be a better world, but Alphabet’s privacy and anti-trust history are beyond shady. Amazon meanwhile is an innovation factory and a patent genius. In the long run, however, neither will be able to compete with the Chinese Tech Dynasty that will arise in the 2020s.

2019–2024 might be the last years we see American tech companies as being on top, the leaders in technology — an event we aren’t likely to see again for the rest of the century. This is because of how Asia’s venture capital system is scaling well beyond the means of even Silicon Valley, with the Chinese Government being very involved in the future of technology, AI and the data-attention economy.

If Amazon is an ecosystem of consumer value, Google really is the AI love affair of our lives, growing up in the 2020s. I have little doubt in the long run that the likes of Huawei, Tencent and Alibaba will eventually catch up and overtake them. Meanwhile, Alibaba is becoming Amazon faster than Amazon can keep up with Alibaba. The evolution of the smart speaker and de facto the smart assistant we are seeing is showing the future of consumer-AI interactions.

Google’s shrinking margins and Amazon’s entry as the 3rd player in Advertising means there’s room for AI-centric companies like Baidu and Huawei to make real headway that many people don’t see coming. To keep up with Google and Amazon however means consumerism alters fundamentally into the data centric economy. We are seeing signs of this already, but it’s nothing compared to what is coming.

Google, booked more than $54 billion in advertising revenue in the first half of 2018 alone. Apple’s profit margins are throw the roof, but these are already companies that belong more to the past, than the future. That’s bad news for the future of American innovation.

Google is in our pockets with Android and a fleet apps that can collect data and serve ads, like Play, Chrome and Maps. But Amazon is that player that gives you a discount that improves your life in a more tangible and direct way. Amazon Alexa glasses and home robots however might feel more personal soon than Google ever felt to our households.

It’s not that we need an Alexa Microwave, but it’s a symbol of what the world is becoming.

The race to AI-as-a-service is more disruptive than autonomous vehicles or retail automation, so if Google can win 2 of 3 of these battles, it can at least remain relevant even as Amazon’s margins are expected to eclipse it eventually. However it’s not clear if Google or Apple will be able to compete with Amazon in things like healthcare or banking or even the advertising of the future.

However who inspires more confidence, Jeff Bezos or people like Larry Page and Sundar Pichai? It doesn’t just come down to easy revenue (like Alphabet collects with advertising), but a strategic understanding of the future of human fulfillment itself, something which I have to give the edge to Amazon. In an era where Facebook will be forgotten, tech titans will battle for the future of artificial intelligence, consumer products, human fulfillment and the smart home itself including personal assistant and companionship robots.

By Michael K Spencer
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