Google's LaMDA vs. ChatGPT: the AI model showdown

ChatGPT blew up the internet, but here is the irony: Google literally invented the core architecture behind it back in 2017.

Now, the tech giant finds itself in an awkward defensive position. While the world fawns over OpenAI, Google has been sitting on its own dialogue system, LaMDA, since 2020. The obvious question everyone is asking: what took Google so long?

Trapped by its own success

Chatbots are hardly brand-new territory. Microsoft launched Tay back in 2016, and Meta pushed out BlenderBot 3 in August 2022. Google even made headlines earlier when engineer Blake Lemoine claimed LaMDA was actually sentient.

So why did Google keep LaMDA locked behind closed doors in its AI Test Kitchen? Basically, money and brand safety.

Advertising accounted for 81% of Google's revenue in fiscal year 2021. As Amr Awadallah, former Googler and current CEO of Vectara, put it: if an engine gives you the single perfect answer, you will not click on any ads. Handing out clean conversational answers actively cannibalizes Google's golden goose.

Then there is reputation. Large language models hallucinate, scrape internet bias, and spread toxicity. OpenAI can afford to run wild with a public research beta; Google cannot risk the regulatory and legal blowback.

Inside Google's Code Red response

Despite the panic, calling Google finished is premature. The giant generated $282.11B in revenue and $66.99B in net profit over the trailing twelve months. OpenAI projecting $1B in revenue by 2024 is tiny by comparison.

CEO Sundar Pichai has reportedly issued a internal "Code Red," rallying teams across research, trust, and safety to accelerate competing AI prototypes by mid-2023.

Google also has enormous firepower to throw at the problem. The company added 30.26K workers this year, with R&D expenses hitting $29.22B over the past nine months alone, up 27.93% year-over-year. It survived threats from Instagram, Snapchat, and TikTok before, keeping a 67.13% social media market share as of November 2022.

Why it matters

For everyday users, LaMDA is not something you can just play with right now. It remains locked down for a small test group. If you want practical AI assistance today, ChatGPT is still the only real game in town.

For the tech industry, this is classic innovator's dilemma on full display. Google clearly has the talent and the tech, but its entire business model relies on users clicking links, not chatting with a bot.

We think Google's Code Red mobilization makes strategic sense, but waiting until mid-2023 gives OpenAI a huge window to build developer habits and user loyalty. Moving forward, Google cannot simply show off flashy demos anymore; it will have to figure out how to reinvent search without killing its $200B ad machine in the process.