As artificial intelligence continues to reshape industries, a new battle is brewing between startups and tech giants. Companies like Perplexity are raising billions to challenge the dominance of Google, Microsoft, Apple and Meta. Yet the question remains: will the AI wave create lasting winners, or is it a bubble ready to burst?
AI search wars: Perplexity against Google, Microsoft, etc.
AI research firm Perplexity has raised three funding rounds this year and launched a fourth, which is expected to value the company at more than $8 billion. The startup seeks to challenge Google’s search supremacy by combining the best of traditional search features with ChatGPT-like question answers. The company currently has annual revenue of just over $10 million (meaning its valuation is 800 times its earnings). It recently launched an enterprise version for enterprise customers that will allow searching for internal files.
Last year, we signed a deal with an AI startup that provided the same enterprise functionality. We didn’t renew because it’s now integrated into our Google Workspace platform, Gemini. We went from $150 per month to $10 per month for the same functionality. See what Google did there?
Guess who else is playing this same game? Have you heard of Copilot, the new “AI Companion” from Microsoft. The partnership with OpenAI has all the features of ChatGPT 4.0 (see below).
There is a Free version and a Pro version (priced similar to Google Gemini at $30 per month) that will integrate with your Microsoft 365 suite. With an interactive voice interface (four voice options), you can remove your Amazon Alexa, Calm, Apple News and many other apps if you want. See what Microsoft is doing?
Apple has quietly acquired more AI companies in the past three years than any other company in the world. Last year alone, they acquired 32 AI/machine learning companies, almost twice as many as Microsoft. The new iPhone 16 with Apple intelligence is just the beginning.
Let’s not forget Facebook which is deploying new tools via Meta’s Ads Manager. These updates, launching now and continuing into next year, will provide ad creatives with advanced background, image and text generation capabilities.
All of this is happening as marketers look to consolidate and/or reduce costs related to their martech stack. According to the latest MarTech Replacement Survey, up to 61% of respondents said the number one factor in favor of an alternative was cost reduction.
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Learning from Past Technology Waves: Lessons for the AI Era
Every technological wave brings winners and losers. It also creates evolution, a better way of accomplishing something. The collapse of Internet companies gave us Amazon, eBay, Coupon.com, and new ways to buy traditional products more efficiently.
The AI bubble will follow. It has already provided new ways to create code, images and content. But, outside of OpenAI and Anthropic, it’s unclear who else in the generative AI space will be the winner.
One thing is certain. We are only at the beginning of the wave of AI solutions. AI startups currently receive a third of all investment dollars, with B2B startups receiving $10 for every dollar invested in B2C applications, according to CB Insights. As a result, we know we’ll see more AI applications aimed at B2B marketers.
The marketer’s dilemma: experiment or wait for integration?
For Perplexity, will it become an AI winner, or will Google put it out of business by integrating its unique features into search? Marketers face a similar question, which can be boiled down to opportunity cost. Is it worth the effort and time to learn a new tool, or are we playing the waiting game to see if our current platforms have the functionality?
Perhaps focusing only on integration and costs is too narrow a perspective. Carrie Mahon, CMO at Unanet, offers a broader view: “Early adoption of new AI tools not only gives marketers a strategic advantage in terms of creativity and efficiency, but also promotes a mindset shift that accelerates AI integration and unlocks greater benefits. Delaying could mean missing out on these early benefits and opportunities for innovation in a rapidly evolving technology landscape.
Could the real value and strategy lie in experimenting with new AI technologies, even if they are expensive, and then transitioning to more efficient platforms as they emerge? Seize the opportunity to learn and innovate, then focus on efficiency.
As a former IBM client said of new technologies: “Let a thousand flowers bloom, then cut them all down except the tallest ones.” » He then added: “Make sure you take care of your garden!” »
Perhaps the AI wave is not a bubble ready to burst but a garden to tend.
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