Reactive Strategy

Feb 8, 2023

Google announced a press release on its soon-to-be-released ChatGPT competitor, Bard. The announcement pre-empted Microsoft’s announcement of integrating a next-gen GPT model into Bing. It’s honestly impressive for both companies: how quickly Microsoft could release something that works and how quickly Google could adapt its strategy. There are very few Fortune 500 companies that have this kind of agility.

These companies are making big bets, fast. On the one hand, you have to make decisions quickly — the playing field is rapidly changing. On the other hand, there’s a lot of room for mistakes. The UX around Bing’s new integration is rough and crowded — it reminds me of design by committee. Google is reacting fast but also showing its vulnerability (although I suppose that’s better than overconfidence and dismissal).

These companies have such large surfaces that decisions can have far-reaching consequences.

What will happen to Google’s $15 billion/year deal with Apple to be the default search for iPhone? Will Bing/Microsoft be a contender? Will that start a bidding war?

Companies building foundational models have partnered with cloud providers: OpenAI (Microsoft) and Anthropic (Google). These companies spend vast amounts on compute to train the models, but their biggest customer will also be their biggest vendor. Weird incentives abound.

Is chat even a good paradigm for search?