Lab Weekly — 05/23/2024

Microsoft Build Event Recap, Plus, the latest AI news on Google, TikTok and more

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Microsoft Rallies Developer Around Copilot

Following the developer events from Google and OpenAI last week, Microsoft laid out the next chapter of its AI playbook this week with two events: a hardware-focused Surface event on Monday that introduced a new “Copilot+ PCs” branding, and its annual Build developer event, which kicked off on Tuesday and unveiled a series of AI integrations into Windows and beyond, as well as developer tools.

Taken together, the deluge of announcements coming from Microsoft this week paints a picture of a company eager to jumpstart the AI revolution in personal computing. Will their plan work? And how will these latest moves from Microsoft impact the AI competitive landscape? Let’s take a look at their key announcements.

In case you missed it…

AI Arms Race Enters New Phase of Scale and Multimodality

Multimodality is the new battleground for AI companies as major players seek to break AI out of the predominantly text-based interface. Here’s what the latest updates from OpenAI and Google tell us about the state of consumer-facing AI development.

News from the 2024 NewFronts

This year, the focus for digital advertisers was on the impact of generative AI, with some additional emphasis on emerging channels like connected TV and retail media networks. Here’s an aggregated recap of the various trends and must-know announcements coming out this year’s NewFronts presentations.

The Rise of Video Podcasts

The recent surge of interest in podcasts on YouTube has made it the top platform for podcast consumption in the U.S., overtaking both Apple Podcasts and Spotify. Here is what the seemingly paradoxical format tells us about the state of the podcasting industry.

Google Plans To Test Search & Shopping Ads In AI Overviews [Wired]

The AI Overviews, which started rolling out to U.S. users last week, aims to provide AI-generated answers. Now, Google has started testing putting relevant ads in them as well. Reportedly, advertisers do not need to adapt their campaigns, as existing ads will be integrated into these AI responses for relevant queries. This move underscores Google’s commitment to evolving its advertising model in tandem AI advancements so as to stay ahead of the competition — Microsoft Copilot is reportedly inserting ads as sources for its outputs as well.

Yet, some users have already been complaining about faulty Overview answers, with some critics saying that the AI-powered experience is worse than the regular search experience. Many articles have been published within the past week on teaching people how to turn it off. If AI Overviews are already facing criticism for inaccurate or unreliable answers, adding ads to the mix could exacerbate user frustration.

This AI Overview debacle also came at a delicate time for Google, as advertiser trust in Google has hit a new low in the wake of recent revelations from the DOJ antitrust trial, which demonstrated how Google has been systematically increasing costs for search advertisers.

Therefore, while advertisers might benefit from enhanced targeting and integration without additional effort, they must also navigate potential user skepticism and backlash towards ad placements within AI-generated answers.

In response, Google will have to strike a delicate balance between maintaining its search ad revenue, as search transitions to a new AI-first interface, and maintaining a positive user experience. Failing to do so could lead to a decline in user engagement and further erosion of trust among both consumers and advertisers.

Related: Google is rolling out a new AI-powered ad format that shows shoppers how items of clothing would look on different skin tones and body types [Wired]; Paramount adds Magnite and programmatic demand to its shoppable ads network [Ad Exchanger]

TikTok Launches “Symphony AI Suite” For Brands [TechCrunch]

Jumping on the bandwagon of AI creative tools, TikTok has launched a new “TikTok Symphony” AI suite that leverages generative AI to let marketers write scripts, produce videos, and enhance existing brand assets. In addition, TikTok is launching a centralized destination for marketers called “TikTok One” where they will be able to access nearly two million creators, discover agency partners and leverage TikTok’s creative tools.

With more and more generative AI ad tools being rolled out to popular platforms like Instagram and TikTok, they promise to democratize content production, enabling brands of all sizes to create engaging and impactful advertisements without extensive resources. For advertisers, the AI-powered tools could streamline the ideation and creative process, and the predictive AI models could improve ad targeting and performances. However, concerns around data privacy, algorithmic bias, and potential misuse of AI-generated brand assets might arise, thus requiring an abundant amount of human oversight.

Related: Sludge videos, a type of viral video that features multiple clips playing simultaneously on a screen, are taking over TikTok [Scientific American]; TikTok is testing AI-generated search results [The Verge]

Apple Nears Deal With OpenAI To Put ChatGPT On iPhone [Bloomberg]

Apple is reportedly close to finalizing a deal with OpenAI to integrate ChatGPT features into its upcoming iOS 18. While Apple has also been in discussions with Google about licensing its Gemini chatbot, no agreement has been reached yet. The Worldwide Developers Conference in June will undoubtedly shed more light on Apple’s AI ambitions and clarify the future of the mobile AI landscape.

Apple’s lack of a proprietary LLM, despite its resources, is somewhat surprising given the potential to enhance Siri — one of the clearest use cases for multimodal LLMs has been to create an actual working voice assistant ever since ChatGPT took off in late 2022. On one hand, relying on partners like OpenAI raises questions about Apple’s long-term AI strategy and control over the technology. On another, it does create a convenient scapegoat for any potential user backlash over faulty AI answers or bias, allowing Apple to deflect blame by attributing such issues to third-party partners rather than its own LLM.

Related: Humane seeks buyer after AI Pin launch [Bloomberg]; Scarlett Johansson’s OpenAI feud rekindles fear in Hollywood [Reuters]

Situational Awareness:

Amazon plans to give Alexa an AI overhaul — and a monthly subscription price [CNBC]

Once again, improving the performance of voice assistants has been a pretty straightforward use case of multimodal LLMs for a while, so it’s good that Amazon is finally revamping Alexa. But if you want to get people to pay extra on a monthly basis to access something that has been mostly free-to-use up until now, (Alexa has been accessible through various Amazon apps, and Echo devices are not that pricey, after all.) then you better make sure that there is a marked improvement in user experience.

Netflix, Apple TV+ and Peacock bundle priced at $15/mo for Comcast Xfinity customers [9to5Mac]

This price tag is evidently on the lower end of what people were expecting this bundle to cost, but considering Comcast owns Peacock, and Apple is not exactly looking to make huge profits off its streaming service, it would seem that Netflix is really the flagship service that is driving the price. Plus, this price is obviously for the ad-supported tiers of Netflix and Peacock, so additional ad revenues would help subsidize the reduced bundle pricing as well.

YouTube tells advertisers its real power is in creator fanbases [Tubefilter]

Want to call out this new CTA ad product that YouTube is launching called branded QR codes, where a brand’s logo will be embedded in the code square, along with a “send to phone” callout, to help increase recall. They are also introducing non-skippable ads on TVs in a “new AI-powered format optimized for CTV.” Needs more details on how that works.

Disney will let Fortnite creators use its IP to make games [Pocket Gamer]

This initiative follows Disney’s $1.5 billion investment in Epic Games earlier this year as part of a multi-year project to create an interoperable entertainment universe with Fortnite. Good to see Disney finally tapping into the vast creative potential of the Fortnite community. I hope they have some strong guardrails and review protocols in place.

A deep-dive into a failed ‘Star Wars’ hotel is going viral [CNN]

Speaking of Disney, a 4-hour-long takedown of the now-shuttered “Star Wars” hotel by video essayist and pop culture influencer Jenny Nicholson has gone viral this week, racking up over 3.8 million views within 4 days. Every brand working in the experience economy could benefit from taking her criticism to heart, as they offer valuable insights that could help enhance customer experiences and avoid similar pitfalls.

• ChatGPT’s iOS and Android apps hit $4.2 million in net revenue from May 13 through May 17, as net revenue grew 22% the day of the GPT-4o launch, TechCrunch reports, citing the latest data from Appfigures.
• Last week, Microsoft and LinkedIn released the 2024 Work Trend Index on the state of AI at work. The report, which surveyed 31,000 people across 31 countries, found that 75% of knowledge workers now use AI at work, and 78% of AI users are bringing their own AI tools to work rather than waiting for their employers to provide them with the tools.
• A new study by PwC found that jobs requiring artificial intelligence skills carry up to a 25% wage premium in some countries, such as the U.S. The study found that wages for AI-related roles were on average 25% higher in the United States than for comparable jobs in the same field that did not require those skills.
• Tesla’s brand reputation continued to slip over the last year as Elon Musk’s antics and other issues tarnished its once-impeccable image, according to new Axios Harris Poll 100 survey results. Tesla soared to 8th place in 2021’s ranking of America’s 100 most visible companies by their perceived image, but has since plummeted to 63rd in the 2024 Poll, which ranks Tesla consistently in the 70s or below on attributes like character, trust, and ethics.

If you find our insights valuable and would like to have a deeper conversation on technology and media innovations, or need to sound smarter in a client meeting or a pitch, please feel free to reach out to Chelsea Freitas, our VP of Strategy, at chelsea@ipglab.com.

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