Kelly Evans
I have to confess that I love the new "AI summaries" Apple offers on notifications in its latest operating system. I also have to confess my love of the "AI overviews" in Google when I use search now. What is happening?!
It turns out, the reason I love using these new features is that both companies are letting AI do sort of an end run around their bloated interfaces to simplify and improve the user experience. Yay for competition once again! We can all thank OpenAI (which has myriad problems of its own) for scaring the big tech platforms into adopting this new technology to make their products better.
Google, after all, was becoming borderline useless. Those of us who remember how amazing it was back when its simple little search box first disrupted Yahoo and AOL's bloatware were shaking our heads in recent years at how frustrating it had become. You want a simple, authentic search result? Good luck scrolling through 15 sponsored links on your mobile phone first. It was also enraging businesses who had to pay up to not get kicked down the page on legitimate search results.
Now, the magic is back. It might even be better. Because instead of having to open a link--unless I'm specifically trying to get to St. Louis "FRED," for instance--I get the info I'm looking for in one quick result. I don't have to open another AI-specific app. I can simply write "why is social security counted as government spending," and get a decent sense of things, plus quick links for further reading.
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Same for Apple's AI summaries. They're sort of hilarious in the matter-of-fact way they present and group information. For instance, this weekend it told me my husband's "Fourth time walking outside was thwarted; feeling stressed and asking about dinner plans," based on a flurry of recent texts.
(I would love if the next iOS update would go a step further, asking him "are you sure you want to send these?" or even suggesting us some dinner ideas: "Would you like me to order your favorites from Bombay Hut?" "Yes!")
Now, the problem for the companies is that both Apple and Google have to figure out a way to keep making as much money with the deployment of these AI advancements. For Google, the disruption is more obvious--I'm skipping past all of those paid ads. How does advertising work in the "AI summary" world?
Money Report
Analysts think they'll figure it out. Bank of America put out a note today saying AI search might actually help drive more search traffic (which my experience would seem to confirm) and better ad targeting. Although I'd still like to know exactly how that works if we are all seeing fewer ads. But the firm argues that if query volumes rise 2.5%, and ad clicks per search rise by a percentage point, Google's search revenue by 2026 should rise 6-8%, they estimate.
As for Apple, anything that makes glancing at my phone easier and more enjoyable seems like a long-term win. Both stocks are trading somewhat off their all-time highs; the sooner they can offer more clarity on how they're monetizing these user innovations--Google especially--the sooner they are likely to regain those levels.
See you at 1 p.m!
Kelly
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