AI Search¶

The Rapid Evolution of AI and its Geopolitical and Economic Implications

This briefing synthesises key insights from the provided source, focusing on the astonishing growth of AI search, its impact on established industries, the intensifying AI talent war, and the complex geopolitical considerations surrounding AI investment.

Topics¶

AI Search

1. The Meteoric Rise of AI Search and its Transformative Impact¶

AI search is experiencing exponential growth, poised to fundamentally alter how individuals interact with the internet.

Rapid Adoption: "AI search is growing insanely fast." Datos, a market intelligence firm, reports that 5.6% of US search traffic now flows through AI search providers, a doubling of market share in just one year. For early adopters (those using LLMs in desktop browsers since April last year), visits to LLMs constitute 40% of their browser usage, up from 24% a year ago.
Beyond Traditional Search: This growth signifies a "sea change for the web comparable to Google's launch and the emergence of the first social media platforms." Unlike traditional search, which primarily aims to find specific destinations, "Over 90% of all the AI searches are what we call informational or productivity based – help me solve this problem, help me answer this question." This indicates a shift towards a more dynamic, problem-solving interaction with the internet.
ChatGPT's Dominance: ChatGPT is a major driver of this shift, with users sending "over two and a half billion prompts every single day." This figure, shared by OpenAI with Axios, represents a significant increase from "over a billion queries a day" in December, indicating usage has "more than doubled in the last 7 months." To put this in perspective, OpenAI is "creeping up on a fifth of Google searches," which currently receive around 5 trillion queries a year.
Implications for Marketers: The rise of AI search has profound implications for marketers, leading to "a ton of discussion in the SEO world about how to switch over to generative engine optimisation." Some optimistically suggest AI search will be "additive rather than replacing traditional search," akin to the mobile boom where mobile traffic surged while desktop traffic remained stable. This suggests AI search could create a "new pillar of how we interact" rather than a one-to-one replacement.

2. The Fierce AI Talent War¶

The race for AI dominance is fuelling an aggressive talent acquisition battle among tech giants.

Poaching Top Talent: Google's success in the International Math Olympiad with its Gemini model, leveraging "advancements in reasoning," immediately triggered poaching efforts. Meta reportedly hired "three Google researchers who designed the model."
Microsoft's Aggressive Recruitment: Microsoft is also actively recruiting from rivals, having "hired around two dozen researchers from Google DeepMind over recent months." This includes "a 16-year Google vet Amar Sabramana who was most recently VP of engineering for Gemini," who has joined Microsoft as a Corporate VP. This aggressive staffing by Microsoft AI CEO Mustafa Sullyman (a DeepMind co-founder) aims to "get back in the race."
Acquisitions for Talent: Amazon's acquisition of AI wearable startup 'B' appears to be a "hiring play rather than Amazon wanting to launch a budget AI wearable." The acquisition, which involves B employees receiving offers to join Amazon, is driven by Amazon's struggles with Alexa and the need for "additional talent with experience in ambient AI."

3. Geopolitics and AI Investment: The Anthropic Dilemma¶

The substantial capital available in the Middle East is forcing AI companies to reconsider their ethical stances on investment, highlighting the complex interplay between innovation and geopolitics.

Anthropic's Policy Shift: Anthropic CEO Dario Amodeo's leaked memo reveals a significant shift in the company's policy, embracing investment from Gulf States. Previously, Anthropic "voseiferously pushed for not allowing big data centres in the Middle East."
Ethical Conflict vs. Commercial Necessity: Amodeo acknowledges the "real downside" of enriching "dictators," stating, "I'm not thrilled about it." However, he concludes that "unfortunately I think no bad person should ever benefit from our success is a pretty difficult principle to run a business on."
The "Race to the Bottom": Amodeo argues that without a collective stance, there's a "race to the bottom where companies gain a lot of advantage by getting deeper and deeper in bed with the Middle East." He feels "stuck with it as an individual company" because "the median position across the other companies appears to be outsourcing our largest 5 gigawatt training runs to UAE and Saudi is fine." This puts Anthropic "at a significant disadvantage."
Resource Imperative: The primary driver for this shift is the need for capital to "stay on the frontier" of AI development. Amodeo notes, "There is a truly giant amount of capital in the Middle East easily hundred billion dollars or more if we want to stay on the frontier we gain a very large benefit from having access to this capital without it it's substantially harder to stay on the frontier."
Public Relations Challenges: Amodeo anticipates a "comm's headache," describing the media and "outside world" as "always looking for hypocrisy while also being very stupid and therefore having a poor understanding of substantive issues." This highlights the difficulty of navigating public perception when making such commercially driven but ethically fraught decisions.
Geostrategic Importance: The source emphasises the "very particular and interesting geostrategic role" of the Gulf, situated "both metaphorically and literally in between the US and China." Investment decisions in this region will "shape the next couple of decades in many more ways." The White House, via AI Tsar David Saxs, has criticised previous refusals to do business with the Gulf States, arguing, "All we will do is push them into the arms of China." This underscores the broader geopolitical stakes involved in AI investment.

FAQ¶

How quickly is AI search growing, and what does this signify for the future of web interaction?
AI search is experiencing rapid growth, with 5.6% of US search traffic flowing through AI providers, double the market share from a year ago. For early adopters, visits to Large Language Models (LLMs) now account for 40% of their browser usage, up from 24% a year ago. This growth suggests that LLMs will become the dominant form of search within a few years. Datos CEO Eli Goodman believes this represents a "sea change" for the web, comparable to the launch of Google and the rise of social media, indicating a fundamental shift in how people engage with the internet.
What is the primary difference in user intent between traditional search and AI search?
The majority of traditional searches are focused on finding specific destinations on the web. In contrast, over 90% of AI searches are "informational or productivity based," aimed at solving problems or answering questions. This distinction highlights AI search's role in providing direct solutions and information rather than just directing users to websites.
How might the rise of AI search impact the marketing and SEO industries?
The emergence of AI search is prompting significant discussion within the SEO world about "generative engine optimisation." Some optimistically suggest that AI search will be additive, rather than completely replacing traditional search, similar to the mobile boom where mobile traffic surged while desktop traffic remained flat. This is because AI search, especially with tools like deep research, serves a different purpose. It could create a new pillar for internet interaction, implying that marketers will need to adapt their strategies to cater to both traditional and AI-driven search behaviours.
What do the latest figures reveal about ChatGPT's usage compared to Google Search?
ChatGPT users currently send over 2.5 billion prompts every day, approaching a trillion requests annually. In comparison, Google receives around 5 trillion queries a year. This places OpenAI's ChatGPT usage at nearly a fifth of Google's searches. Furthermore, ChatGPT's usage has more than doubled in the last seven months, from 1 billion queries a day in December to 2.5 billion, indicating a very significant pace of growth.
What are the recent trends in AI talent acquisition among major tech companies?
There is a significant "talent war" underway in the AI sector. Google researchers who designed a version of the Gemini model were reportedly poached by Meta. Separately, Microsoft has hired approximately two dozen researchers from Google DeepMind in recent months, including a long-time Google VP of engineering for Gemini who joined Microsoft as a corporate VP. These moves suggest an aggressive effort by companies like Meta and Microsoft to staff up their AI divisions and enhance their competitive position.
What is Amazon's strategy with its recent acquisition of the AI wearable startup 'B'?
Amazon has acquired 'B', an AI wearable startup offering a watch that summarises or transcribes conversations at a low price point of $50. While the product is a budget AI wearable, the rationale behind the acquisition could primarily be a "hiring play." Amazon has faced challenges with its Alexa voice assistant, and acquiring 'B' allows them to bring in additional talent with expertise in ambient AI, potentially bolstering their efforts to improve their AI offerings.
Why did Anthropic CEO Dario Amodei decide to accept investment from Gulf States, despite initial reservations?
In a leaked memo, Anthropic CEO Dario Amodei expressed reluctance about accepting investment from Gulf States, acknowledging that it would likely "enrich dictators," which he described as a "real downside." However, he concluded that Anthropic would take the money due to the immense capital available in the Middle East (easily £80 billion or more). Amodei stated that access to this capital is crucial for Anthropic to "stay on the frontier" in the AI race, as lacking it would put them at a "significant disadvantage" compared to other companies that are already outsourcing large training runs to the UAE and Saudi Arabia. He felt that having failed to collectively prevent this dynamic, the company was "stuck with it as an individual company."
What broader geopolitical implications are highlighted by Anthropic's decision to seek investment from Gulf States?
Anthropic's decision to accept investment from Gulf States highlights the complex geopolitical role of the region, which sits "metaphorically and literally in between the US and China." The memo revealed a previous stance against allowing large data centres in the Middle East due to concerns about a "race to the bottom" and companies getting "deeper and deeper in bed" with the region. However, the need for capital for the AI race has shifted this position. This discourse has drawn criticism, with some suggesting that the initial criticism of investment deals with the Middle East by companies like Anthropic was hypocritical. The broader implications extend beyond the AI race, as where the Gulf States decide to put their emphasis and capital will shape the next couple of decades.

Timneline¶

Past Events (Date not specified, but prior to current reporting):¶

April Last Year: Datos began tracking a separate cohort of people using LLMs in their desktop browsers. At this time, visits to LLMs constituted around 24% of this cohort's browser usage.
A Year Ago: AI search market share was half of what it is currently (meaning it was 2.8% of US search traffic). Visits to LLMs for the early adopter cohort were around 24% of their browser usage.
December (Prior Year): Sam Altman stated that OpenAI users were sending over 1 billion queries a day to ChatGPT.
Recent Months (Prior to current reporting): Microsoft hired around two dozen researchers from Google DeepMind.
Earlier This Week: OpenAI and Google demonstrated "gold medal performances" in the International Math Olympiad. It was subsequently reported that three Google researchers who designed a version of the Gemini model (responsible for Google's performance) were being poached by Meta.
Sunday (This Week): Anthropic CEO Dario Amodei sent a multi-page Slack memo to Anthropic staff, weighing the pros and cons of accepting investment from Gulf States, ultimately concluding they would take the money.
Current Events (Occurring within the reported timeframe):

Visits to LLMs for the early adopter cohort now constitute 40% of their browser usage.
OpenAI users are sending over 2.5 billion prompts every single day to ChatGPT, which is more than double the usage from seven months ago. This amounts to nearly a trillion requests per year.
Google is currently receiving around 5 trillion queries a year.
Meta has hired three Google researchers who worked on the Gemini model.
Microsoft has hired approximately two dozen researchers from Google DeepMind in recent months.
Amazon has acquired the AI wearable startup "B." The transaction has not yet closed.
A leaked memo from Anthropic CEO Dario Amodei reveals a shift in the company's policy to accept investment from Gulf States, despite initial reluctance.
The White House's AI Tsar, David Saxs, criticised Anthropic's new stance on Middle East investment.
Tuesday (This Week):Sam Altman was scheduled to speak at a Federal Reserve event to discuss the impact of AI on jobs.
Amar Sabramana, a 16-year Google veteran and former VP of engineering for Gemini, announced on LinkedIn that he had joined Microsoft as a Corporate VP.
Wednesday (This Week - at time of recording):Sam Altman was scheduled to be present at the White House for a keynote from the President at the AI Race Summit.
The "AI Action Plan" was to be the subject of a main episode coinciding with the White House summit.

Cast of Characters¶

Eli Goodman: CEO of Datos, a market intelligence firm. He believes the growth of AI search is a "sea change for the web," comparable to the launch of Google and the emergence of social media platforms.
Andrew Lipman: Founder of Media Ads and Commerce, a consulting firm. He optimistically believes that AI search will be additive to traditional search, rather than replacing it, comparing it to the mobile boom where desktop traffic remained flat while mobile surged.
Sam Altman: CEO of OpenAI. He is actively involved in discussions about AI's impact, including jobs and democratising benefits. He reported that ChatGPT usage has more than doubled in the last seven months, with users now sending 2.5 billion prompts daily. He was scheduled to speak at the Federal Reserve and attend a White House summit.
Mark Zuckerberg ("Zuck"): Founder of Meta. The reporting suggests he may have been personally involved in the poaching of Google researchers for Meta.
Mustafa Suleyman: Microsoft AI CEO and co-founder of DeepMind. He is reported to be aggressively staffing up his AI division by hiring researchers from Google DeepMind.
Amar Sabramana: A 16-year Google veteran who was most recently VP of engineering for Gemini. He announced on LinkedIn that he has joined Microsoft as a Corporate VP.
Dario Amodei: CEO of Anthropic. Author of a leaked multi-page memo discussing the company's decision to accept investment from Gulf States despite initial reservations about enriching "dictators" and the potential "erosion of standards."
David Saxs: The White House's AI Tsar. He publicly criticised Anthropic for seeking investment from the Middle East after previously opposing President Trump's AI investment deals with the region.