Google had a ‘Kodak moment’ last year as Microsoft takes lead in AI, strategist says
Google launched Bard AI, it’s own chatbot to rival Microsoft and OpenAI’s ChatGPT.
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Google last year had a “Kodak moment” when it came to artificial intelligence, giving rival Microsoft an edge with the technology, one strategist told CNBC on Wednesday.
Cyrus Mewawalla, head of thematic intelligence at GlobalData, called AI the big theme of 2023 and said that “Microsoft has stolen a lead on Google” with its investment in OpenAI — the company behind ChatGPT.
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“Microsoft is currently winning this race in AI,” Mewawalla told CNBC’s “Squawk Box Europe.”
ChatGPT is a viral AI chatbot that is trained on large amounts of data to give responses to user queries.
Microsoft has announced plans to integrate ChatGPT into some cloud computing products, as it looks to infuse AI across its business.
Google, under parent Alphabet, has been investing in AI for years. The company acquired British AI start-up Deepmind in 2014 to supercharge its efforts with the technology.
Last week, Alphabet merged its Google Research team Brain with DeepMind, in a bid to bring the arms closer and concentrate its AI efforts.
Mewawalla said this should have been done “a long time ago” and that Google, even though it has “great AI,” fell behind Microsoft last year.
“In a way in 2022, it (Google) had a Kodak moment. It had the leading product but it kept it aside for fear that it could cannibalize its core business. Now its core business is under massive threat,” Mewawalla.
Google’s search product is the tech giant’s core business. Microsoft has also been integrating OpenAI technology into its search product Bing.
A Kodak moment is a phrase used to describe the inability to foresee future trends. It references camera firm Eastman Kodak Company, which failed to transition into the digital age.
In response to Microsoft, Google launched its own chatbot called Bard AI this year and has begun testing it with users. Sundar Pichai, CEO of Alphabet, said on a Tuesday earnings call that the company will be bringing the AI technology behind Bard into search products in the future.
Analysts said that, while Google has strong AI technology, it hasn’t brought it into products fast enough, as Microsoft has done.
“Google’s issue is that they have the brightest minds in AI, they have the rockstars, they have a third of the top hundred cited papers in AI, but they’re an engineering-led company, and they have not productized what they’ve done,” Richard Kramer, senior analyst at Arete Research, told CNBC’s “Worldwide Exchange.”
Some analysts see Alphabet’s investment in AI over the years as giving it an advantage, going forward.
JPMorgan said in a note published Wednesday that Alphabet is “well positioned in AI through years of investments across its business lines” and is accelerating efforts around commercializing the technology behind AI chatbots, known as large language models.
Executives talked up the company’s prowess and investments in AI during Alphabet’s first-quarter earnings call on Tuesday. Ruth Porat, CFO of Alphabet, said that the company will increase its capital expenditure this year from 2022, with AI being a “key component” of that.
Pichai said Alphabet is infusing its AI technology across many different products.
“First, the incredible AI opportunity for consumers, our partners and for our business. I’ve compared it to the successful transition we made from desktop to mobile computing over a decade ago. Our investments and breakthroughs in AI over the last decade have positioned us well,” Pichai said.
Charles Liang, chief executive officer of Super Micro Computer Inc., during the Computex conference in Taipei, Taiwan, on Wednesday, June 5, 2024. The trade show runs through June 7.
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Embattled server maker Super Micro Computer said on Monday that it’s hired BDO as its new auditor and submitted a plan to Nasdaq detailing its efforts to regain compliance with the exchange. The shares jumped 23% in extended trading.
“This is an important next step to bring our financial statements current, an effort we are pursuing with both diligence and urgency,” Super Micro CEO Charles Liang said in a statement.
Super Micro is late in filing its 2024 year-end report with the SEC, and said earlier this month that it was looking for a new accountant after its previous auditor, Ernst & Young, stepped down in October. Ernst & Young was new to the job, having just replaced Deloitte & Touche as Super Micro’s accounting firm in March 2023.
Super Micro said it told Nasdaq that it believes it will be able to file its annual report for the year ended June 30, and quarterly report for the period ended Sept. 30. The company said it will remain listed on the Nasdaq pending the exchange’s “review of the compliance plan.”
Shares of Super Micro soared more than twentyfold over a two year period from early 2022 until their peak in March of this year. But the stock has been hammered on troubling news about its compliance with Nasdaq. Once valued at about $70 billion, the company’s market cap was at $12.6 billion at the close on Monday, following a 16% rally during regular trading.
Super Micro has been one of the primary beneficiaries of the artificial intelligence boom, due to its relationship with Nvidia. Sales last fiscal year more than doubled to $15 billion.
On Monday, Super Micro announced that it was selling products featuring Nvidia’s next-generation AI chip called Blackwell. The company competes with vendors like Dell and Hewlett Packard Enterprise in packaging up Nvidia AI chips for other companies to access.
Super Micro was added to the S&P 500 in March, reflecting its rapidly growing business and then-soaring stock price. Less than two weeks after the index changes were announced, Super Micro reached its closing high of $118.81.
The troubles began within months. In August, Super Micro said it wouldn’t file its annual report with the SEC on time. Noted short seller Hindenburg Research then disclosed a short position in the company, and said in a report that it identified “fresh evidence of accounting manipulation.” The Wall Street Journal later reported that the Department of Justice was at the early stages of a probe into the company.
The month after announcing its report delay, Super Micro said it had received a notification from the Nasdaq, indicating that the delay in the filing of its annual report meant the company wasn’t in compliance with the exchange’s listing rules. Super Micro said the Nasdaq’s rules allowed the company 60 days to file its report or submit a plan to regain compliance. Based on that timeframe, the deadline was Monday.
WATCH: Super Micro is a sell due to accounting irregularities
Kelly Steckelberg attends an Evening from the Heart LA 2022 Gala hosted by the John Ritter Foundation for Aortic Health at Valley Relics Museum in Van Nuys, California, on May 5, 2022.
Araya Doheny | Getty Images
Canva, a high-valued design software startup that competes with Adobe, said Monday that it hired Kelly Steckelberg as its chief financial officer, five years after she helped take Zoom public and then guided the company through its Covid-19 pandemic surge.
Founded in 2013, Canva was valued recently at $32 billion, a drop from its peak of $40 billion in 2021.
“Kelly’s impressive track record as a strong leader and strategic thinker, combined with her proven expertise in scaling enterprise companies, make her the perfect addition to our leadership bench,” Canva said in an emailed statement.
Canva is generating about $2.5 billion in annualized revenue and boasts 220 million monthly users. The company is widely viewed as a top initial public offering candidate for venture-backed tech companies after a historically slow period for new offerings dating back to early 2022.
On Monday, ServiceTitan, which sells software for the trades, filed to list on the Nasdaq. Cerebras, a maker of artificial intelligence chips, has been on file since late September, and online lender Klarna said last week that it has confidentially filed its IPO paperwork with the U.S. Securities and Exchange Commission.
A Canva spokesperson declined to comment on the startup’s timeline for an IPO.
Steckelberg held financial positions at Cisco and was CEO of online dating company Zoosk before joining Zoom in 2017. Steckelberg is based in Austin, Texas, while Canva has its headquarters in Sydney, Australia.
Zoom went public with Steckelberg’s help in 2019. The video-chat company saw its market cap soar to upward of $160 billion in October 2020, early in the Covid-19 pandemic, as users working from home swarmed to the app. Zoom has since lost more than 85% of its value.
Steckelberg announced her departure from Zoom in August after seven years at the company. Last month, former Microsoft executive Michelle Chang replaced Steckelberg as Zoom’s CFO.
Canva’s previous finance chief Damien Singh resigned in February after the company said it was conducting an internal investigation surrounding inappropriate behavior.
ServiceTitan offices in Draper, Utah.
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ServiceTitan, a company that sells software to contractors such as plumbers and roofers, on Monday filed to go public on the Nasdaq under the ticker symbol “TTAN.”
The filing suggests that investors could be getting more interested in next-generation software companies. Just a few, including Reddit and Rubrik, debuted on public markets in the U.S. this year, and chipmaker Cerebras filed for an initial public offering. There were basically no tech initial public offerings in 2021 or 2022 as central bankers pushed up interest rates to flight inflation, making investors less willing to bet on money-losing challengers.
Based in Glendale, California, ServiceTitan offers cloud software for advertising, scheduling jobs, dispatching, producing invoices and taking payments. It had a $35.7 million net loss on $193 million in revenue in the quarter that ended on July 31, according to the filing. Revenue was up about 24% year over year, and the quarterly loss had narrowed from almost $52 million.
ServiceTitan’s revenue growth rate will stand out for people investing in cloud stocks, who have seen rates sag with few new public companies in the sector. The average growth rate for Bessemer’s Nasdaq Emerging Cloud Index, the basis for the WisdomTree Cloud Computing Fund, is 16.6%.
The company was originally founded in 2007 by Ara Mahdessian and Vahe Kuzoyan, whose fathers were both residential contractors. While most ServiceTitan customers are small and medium-sized businesses, it has started focusing more on selling products to big companies and construction customers, according to the filing.
ServiceTitan plans to keep up to 5% of shares in the IPO for eligible clients, the founders’ friends and family members and others through a directed share program.
Investors include Battery Ventures, Bessemer Venture Partners, Iconiq and TPG. Iconiq on its own controlled 24% of the compan’s Class A shares.
Competitors include Salesforce and SAP, along with specialty companies such as HouseCall Pro, Jobber and Workwave.
Goldman Sachs, Morgan Stanley, Wells Fargo and Citigroup are among the company’s IPO underwriters.
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