Long read: Tech Philosophy and AI Opportunity

If your life is anywhere close to the intersection of business and technology, either as an investor in technology or a technology entrepreneur, Ben Thompson’s blog site Stratechery should be mandatory reading. Indeed, we would urge investors and business owners in general would do good to read as well, as technology becomes all pervasive.

In this piece, Ben helps us with an interesting 2X2 model to understand how the big tech companies – Apple, Microsoft, Google and Meta view technology’s role with respect to human beings and whether AI is a threat or an opportunity to their businesses.

He begins with news about how Meta is splurging on AI talent with salaries often running into tens of millions of dollars if not more:

“Apple Inc.’s top executive in charge of artificial intelligence models is leaving for Meta Platforms Inc., another setback in the iPhone maker’s struggling AI efforts. Ruoming Pang, a distinguished engineer and manager in charge of the company’s Apple foundation models team, is departing, according to people with knowledge of the matter. Pang, who joined Apple from Alphabet Inc. in 2021, is the latest big hire for Meta’s new superintelligence group, said the people, who declined to be named discussing unannounced personnel moves.

To secure Pang, Meta offered a package worth tens of millions of dollars per year, the people said. Meta Chief Executive Officer Mark Zuckerberg has been on a hiring spree, bringing on major AI leaders including Scale AI’s Alexandr Wang, startup founder Daniel Gross and former GitHub CEO Nat Friedman with high compensation. Meta has also hired Yuanzhi Li, a researcher from OpenAI, and Anton Bakhtin, who worked on Claude at Anthropic PBC, according to other people with knowledge of the matter. Last month, it hired a slew of other OpenAI researchers.”

He uses this context of Meta poaching from Apple to establish the contrast between the two firms when it comes to their aggression or lack thereof in AI investments: “First, the potential impact of AI on Apple’s business prospects, at least in the short term, are fairly small: we still need devices on which to access AI, and Apple continues to own the high end of devices…That significantly reduces the financial motivation for Apple to outspend other companies in terms of both GPUs and researchers. Second, AI, at least some of the more fantastical visions painted by companies like Anthropic, is arguably counter to Apple’s entire ethos as a company.”

He then introduces the ‘Tech’s Two Philosophies’ approach to show why it means so much to Meta (and Google too). These two companies view computers doing things for people whilst Apple (and Microsoft) see computers as tools that humans can leverage.

“In Google’s view, computers help you get things done — and save you time — by doing things for you. Duplex was the most impressive example — a computer talking on the phone for you — but the general concept applied to many of Google’s other demonstrations, particularly those predicated on AI: Google Photos will not only sort and tag your photos, but now propose specific edits; Google News will find your news for you, and Maps will find you new restaurants and shops in your neighborhood. And, appropriately enough, the keynote closed with a presentation from Waymo, which will drive you…

Zuckerberg, as so often seems to be the case with Facebook, comes across as a somewhat more fervent and definitely more creepy version of Google: not only does Facebook want to do things for you, it wants to do things its chief executive explicitly says would not be done otherwise. The Messianic fervor that seems to have overtaken Zuckerberg in the last year, though, simply means that Facebook has adopted a more extreme version of the same philosophy that guides Google: computers doing things for people.”

However, Apple’s philosophy can be understood by this quote from Steve Jobs from the pre-internet and mobile era:

“I remember reading an article when I was about 12 years old, I think it might have been in Scientific American, where they measured the efficiency of locomotion for all these species on planet earth, how many kilocalories did they expand to get from point A to point B, and the condor came in the top of the list, surpassed everything else, and humans came in about a third of the way down the list, which was not such a great showing for the crown of creation.

But somebody there had the imagination to test the efficiency of a human riding a bicycle, and a human riding a bicycle blew away the condor all the way off the top of the list. And it made a really big impression on me that we humans are tool builders, and that we can fashion tools that amplify these inherent abilities that we have to spectacular magnitudes. And so for me a computer has always been a bicycle of the mind, something that takes us far beyond our inherent abilities. I think we’re just at the early stages of this tool, very early stages, and we’ve come only a very short distance, and it’s still in its formation, but already we’ve seen enormous changes. I think that’s nothing compared to what’s coming in the next 100 years.”

With these two philosophies establishing the two ends of the X-axis, he shows how much of an opportunity, or a threat is AI to each of this companies on the Y-axis using Clayton Christensen’s (author of Innovator’s dilemma) model for sustaining innovation and disruptive innovation. As established earlier in the article, it is indeed neutral for Apple but an immense opportunity for Meta and Microsoft and a massive threat for Google. We recommend reading the whole piece to visualise the plotting. As Ben acknowledges this is just one model to understand the landscape but insightful nonetheless.