How AI Kingpins Lost the Chatbot War Why Microsoft beat other tech giants to market on generative AI

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Speech bubble surrounded by Amazon, Google and Apple logos

Amazon, Apple, and Google have been building chatbots for years. So how did they let the alliance between Microsoft and OpenAI integrate the first smash-hit bot into Microsoft products?

What happened: Top AI companies brought their conversational agents to market over the past decade-plus amid great fanfare. But Amazon’s Alexa, Apple’s Siri, and Google’s Assistant succumbed to technical limitations and business miscalculations, The New York Times reported. Meanwhile, Microsoft launched, retooled, and ultimately killed its entry, Cortana, instead banking on a partnership with OpenAI, whose ChatGPT went on to become a viral sensation.

Amazon: Alexa hit the market in 2014. It garnered great enthusiasm as Amazon integrated it into a range of hardware like alarm clocks and kitchen appliances.

  • Amazon tried to emulate Apple’s App Store, developing a skills library that customized Alexa to play simple games or perform tasks like controlling light switches. However, many users found the voice-assistant skills harder to use than mobile apps.
  • Amazon had hoped that Alexa would drive ecommerce, but sales didn’t follow. The division that includes Alexa suffered billions of dollars in financial losses in 2022 and reportedly was deeply affected by the company’s recent layoffs.

Apple: Siri became a fixture in iPhones in 2011. It drove a spike in sales for a few years, but the novelty wore off as it became mired in technical complexity.

  • Siri’s engineers designed the bot to answer questions by querying a colossal list of keywords in multiple languages. Each new feature added words and complexity to the list. Some required engineers to rebuild Siri’s database from scratch.
  • The increasingly complex technology made for infrequent updates and made Siri an unsuitable platform for more versatile approaches like ChatGPT.

Google: Google debuted Assistant in 2016. It touted Assistant’s ability to answer questions by querying its search engine. Meanwhile, it pioneered the transformer architecture and built a series of ever more-capable language models.

  • Like Amazon with Alexa skills, Google put substantial resources into building a library of Assistant actions, but the gambit didn’t pay off. A former Google manager said that most users requested tasks like switching lights or playing music rather than web searches that would generate revenue.
  • In late 2022, Google reduced its investment in Assistant. The company’s recent layoffs affected 16 percent of Assistant’s division.
  • Google debuted the transformer in 2017 and used it to build the Meena language model in 2020. The Meena team encouraged Google to build the model into Assistant, but the executives — sensitive to criticism after having fired two prominent researchers in AI ethics — objected, saying that Meena didn’t meet the company’s standards for safety and fairness, The Wall Street Journal reported.
  • On Tuesday, the company started to allow limited access to Bard, a chatbot based on Meena’s successor LaMDA. (You can sign up here.) Last week, it previewed LaMDA-based text generation in Gmail and Google Docs. These moves followed Google CEO Sundar Pichai’s December “code red” directive to counter Microsoft by focusing on generative AI products.

Why it matters: The top AI companies devoted a great deal of time and money to developing mass-market conversational technology, yet Microsoft got a jump on them by providing cutting-edge language models — however flawed or worrisome— to the public.

We’re thinking: Microsoft’s chatbot success appears to be a classic case of disruptive innovation: An upstart, OpenAI, delivered a product that, although rivals considered it substandard, exceeded their products in important respects. But the race to deliver an ideal language model isn’t over. Expect more surprise upsets to come!


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