🚀 Google and Microsoft go to war

Plus, our thoughts on the latest in consumer AI!

Justine & Olivia Moore

Feb 12, 2023

trending 📈

🥊 Google and Microsoft duke it out. Google debuted its answer to ChatGPT: an AI-powered chatbot called Bard, currently in private beta before it publicly launches in a few weeks. The launch was, unfortunately, marred by an ad in which Bard gave the wrong answer to a science question - causing the stock to lose $100B in value. Google also announced more AI features coming to the core search product.

Microsoft also made moves with the release of a new version of search engine Bing powered by OpenAI. Early reviews are solid, making a Bing comeback more believable by the day (we never thought we’d say that!). CEO Satya Nadella issued a direct threat to Google - saying he wants “people to know that we made them dance” 😂

🛑 Twitter suffers outage. It was a rocky week for Twitter infrastructure, with users unable to tweet or view tweets for a few hours on Wednesday. The outage resulted in CEO Elon Musk asking the team to delay new feature development in favor of increasing stability ahead of major events like the Super Bowl. However - Twitter has continued to announce (and debut) new features for Blue subscribers, including the ability to send 4,000 character tweets and a 50% reduction in ads for subscribers.

📉 Tech earnings disappoint. We’re now more than halfway through earnings season, and the news hasn’t looked good for many tech companies.

Lyft shares fell 30% after beating earnings and revenue estimates, but announcing weak guidance for Q1 due to seasonality and lower prices.
Affirm, on the other hand, missed earnings - and laid off 19% of staff. CEO Max Levchin said this was a result of “dampened consumer spending” and an increased cost of borrowing for Affirm itself.
Disney+ reported its first subscriber loss since launch in 2019, with a decrease of 2.4M users. The broader Disney company plans to lay off 7k employees.

New data from Qustodio, a parental control software provider, provides a look into how 400,000+ kids aged 4-18 are spending time online across devices. The above shows highest engagement platforms in terms of average time per day per active user - Roblox is a clear #1 at three hours 👑. Check out Olivia’s analysis on this here.

what we’re following 👀

Reddit users are jailbreaking ChatGPT’s restrictions with a prompt called DAN.

This year’s Thiel Fellows were announced - they’re working on problems like wearables for sleep and whole-body cryopreservation for pets.

A look inside the new Harry Potter game, Hogwarts Legacy!

Olivia joined the a16z podcast this week to talk about the “state of the apps!” Check out the full episode or her summary here.

Justine Moore @venturetwins

We're now living in the the age of AI. Adoption of AI tools has outpaced every consumer tech trend of the past decade - and this is just the beginning. Announcing "Everyday AI" from me & @conniechan:

In case you haven’t consumed enough AI content this week - we’d highly recommend checking out Justine’s new piece on the opportunities ahead in consumer AI.

Justine has been diving deep on AI over the past five months (as you can probably tell from her Twitter 😂), and she’s sharing early applications she’s seen + predictions for the future. A couple of the categories covered, and a few companies to check out:

🔎 Search (e.g. Perplexity, Consensus, Andi) - instead of endless scrolling on Google, you can now ask a question in natural language and get a single, concise answer. We expect to see this for use cases like product discovery as well.
📚 Learning (e.g. Speak, Photomath, Orchard) - AI enables us to deploy personalized learning plans at scale and level up written work + presentations. Students are already early adopters of many AI tools for this reason!
💕 Relationships (e.g. Replika, CharacterAI, Mumkin) - like it or hate it, people are forming meaningful relationships with AI bots. They can also help us strengthen our IRL communication with family and friends.
🤝 Therapy and Coaching (e.g. Woebot, Prodigy, Poised) - 1:1 time with a therapist or coach is expensive and inaccessible for many consumers. AI can provide personalized coaching, available 24/7, at scale.
🪄 Creation (e.g. Midjourney, Magician, Boomy) - generative AI feels like magic when it comes to content creation. The first mega viral use case was AI portraits with Lensa, but we’re now seeing it expand to video, music, design, and more.
🎮 Games (e.g. Scenario, Promethean, Inworld) - AI tools are making it significantly faster and cheaper to create quality game assets, characters, and even virtual worlds. More from a16z’s games team on this here.
🛒 SMB and Commerce Tools (e.g. Sameday, Truelark, Booth) - for SMBs and e-comm merchants, AI can serve as an extra set of hands: answering phones, booking appointments, talking to customers, marketing, and much more.

We’ve also been spending time in a couple of categories not mentioned here, like AI x travel and news. If you’re building a company in any of these spaces, we’d love to hear from you - please reach out to jmoore@a16z.com!