Lab Weekly — 05/31/2024

The Backlash to Google’s AI Search; New Floor 9 podcast episode, Plus, the latest news and must-know stats on AI and AR

Want this newsletter in your inbox every week? Sign up for our mailing list here

The Backlash to Google’s AI Search, Explained

Why Google Search telling people to eat rocks is just the tip of the iceberg that’s about to hit online media ecosystem

In case you missed it…

Microsoft Rallies Developers 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. 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.

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.

Episode 157: 2024 Developer Conferences Are All About AI

May marks the beginning of the tech conference season, and this year, we had three key players in the AI race — OpenAI, Google, and Microsoft — all hosting their respective developer events within a two-week period in May. If you missed the announcements, fret not! The Lab team is here to help you keep up with the fast-evolving AI developments and competitive landscape.

In this episode, Chelsea Freitas from our Strategy team, along with Ryan Miller and Tom Trudeau from our partnerships team, took the Floor 9 mic and discussed all the highlights from the recent developer conferences, including:

• Microsoft’s hardware-centric Surface event — 0:52
• Key announcements from Microsoft’s Build event — 9:03
• The advertising implications of Copilot and Microsoft’s AI features — 16:45
• Key announcements from Google’s I/O developer event — 19:55
• The impact of Google rolling out AI search — 21:23
• Google integrating Gemini AI into its suite of popular products — 24:31
• Google’s new multimodal AI-powered creative tools — 29:03

If you enjoyed the episode, please consider giving us a five-star review on Apple Podcast. Follow the Lab on X @ipglab and on Medium for our latest insights. Thanks for listening!

Google Strikes Partnership Deal With AR Startup Magic Leap [Reuters]

Many analysts are quick to point out that Google has been a big investor in Magic Leap, and strategically, this alliance makes a lot of sense, given the recent advances made by Apple and Meta into the AR headset space. The question remains whether Magic Leap can actually deliver on its initial promise of light-weight AR glasses. After all, the company has been around since 2010, and has not yet shipped a single consumer product. The first iteration of its AR headset was poorly reviewed in late 2018, and the second iteration, which was introduced in 2022, pivoted to a niche enterprise positioning that never gained much traction.

However, Magic Leap still has some valuable AR and wearable patents that Google may be able to make use of. And in order to keep up with Meta and Apple on the mixed reality devices, Google certainly needs all the help it can buy. Still, Meta is trying to corner the lower-end mass market of XR devices while Apple is currently focusing on the higher end of the market with Vision Pro. I presume that Google and Magic Leap’s joint output will land somewhere in the middle. The question is, is there a market for a mid-market AR headset?

Related: Marvel’s What If…? Vision Pro app is an awkward mix of video game and movie [The Verge]; AR laptop ‘Spacetop G1’ now available for pre-order [9to5Mac]; Meta’s Ray-Ban glasses will post Instagram stories for you [The Verge]

Reebok Partners With Instagram For AI-Based Digital Sneaker Design [CSA]

Reebok has partnered with Instagram to introduce “Reebok Impact,” an AI-powered digital sneaker design tool. This feature allows consumers to customize digital versions of Reebok sneakers using AI. Fans can send Reebok a direct message on Instagram with a photo, which the company will use generative AI to render them as customized Reebok designs. The service is free for up to four digital sneaker creations, which users can share or purchase as game-ready files compatible with platforms like Fortnite and Roblox.

Additionally, Reebok Impact offers incentives for purchasing physical sneakers. This initiative is part of Reebok’s broader strategy to innovate and engage with consumers through digital fashion and 3D items. Through this initiative, Reebok shows how brands can leverage AI to enhance consumer engagement, offer personalized experiences, and explore new revenue opportunities in the digital age.

Related: Alexa’s Fire TV search has a new AI, but it needs some work [The Verge]; Google has officially rolled out the YouTube Music Gemini extension [DataConomy]; Google adds AI-powered features to Chromebook [TechCrunch]

Amazon Makes Grubhub+ A Permanent Prime Membership Perk [Axios]

Amazon has expanded its Grubhub partnership to let US customers order food delivery inside Amazon’s app through Grubhub; It has also turned Grubhub+, the paid tier for Grubhub users, a permanent perk included in Prime membership. This move not only makes Prime more attractive and sticky, but also diversifies Amazon’s service offerings. By integrating Grubhub, Amazon collects valuable data for personalization, especially for its growing online grocery business, and offers a seamless experience that encourages frequent use and strengthens customer loyalty.

Related: The FAA approves Amazon’s Prime Air program to fly drones beyond a pilot’s line of sight, letting Amazon expand its delivery area in College Station, Texas [Bloomberg]; Amazon’s grocery subscription service for Amazon Fresh and Whole Foods is now live [CNET]

Situational Awareness:

PwC strikes OpenAI deal to become the first reseller of ChatGPT Enterprise [VentureBeat]

PwC is selling ChatGPT extensions to simplify AI adoption for businesses while upselling their consultancy services to optimize AI integration and results. You gotta respect the hustle.

OpenAI creates a Safety and Security Committee to explore AI risks [NYT]

Welp, better to have some guardrails than nothing, even though this might ultimately end up being a bit of security theater.

Microsoft to release next ‘Call of Duty’ game on subscription service [Reuters]

This move marks a major shift for Microsoft’s gaming strategy. Curious to see if more Triple-A game titles will follow suit upon launch.

• The inflation rate for “food at home,” basically the stuff you buy at the supermarket, is really low these days, with prices rising just 1.1% over the last year, Axios reports, citing data from the Bureau of Labor Statistics. Dining out is worse — prices rose 4.1% over the last year, far faster than costs at the grocery store or overall inflation.
• Ads are increasingly important for the streaming services, as 56% of new subscribers chose the cheaper ad-supported tier in Q1 2024, and there were at least 93 million ad-supported streaming subscriptions in the United States at the end of last year, according to estimates from Brian Wieser, an industry analyst, and Antenna, a subscription research firm, the New York Times reports.
• Over the last few years, two Chinese-owned e-commerce platforms — Shein and Temu — have quietly become some of the most popular shopping websites in the US. Temu had 47 million US monthly active users as of April 2024, while Shein had 29 million. Amazon clocked in at 66 million, down from almost 70 million in September of 2022 when Temu launched, according to estimates from the market intelligence firm Sensor Tower, writes the Big Technology newsletter.

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.

If you liked this edition of Lab Weekly by IPG Media Lab, why not share it?