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The Evolution and Impact of AI-Powered Search Engines

GOOVER DAILY REPORT August 10, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Overview of AI-Powered Search Engines
  3. Technological Advancements and Market Impact
  4. Partnerships and Collaborations
  5. Ethical Concerns and Legal Challenges
  6. Conclusion

1. Summary

  • The report titled 'The Evolution and Impact of AI-Powered Search Engines' delves into the rise of AI-driven search technologies, particularly focusing on OpenAI's SearchGPT and its market competitor Perplexity AI. It discusses the technological advancements represented by tools like GPT-4o, the strategic partnerships these companies form with publishers, and their innovative revenue-sharing models. The report also highlights the ethical and legal challenges faced by AI companies due to data scraping practices and copyright infringements. By examining these factors, the report underscores the transformative impact AI-powered search engines have on traditional search, the changing landscape of information retrieval, and the implications for major players like Google.

2. Overview of AI-Powered Search Engines

  • 2-1. Introduction to SearchGPT by OpenAI

  • SearchGPT is an AI-powered search engine developed by OpenAI, announced as a competitor to major players like Microsoft’s Bing and emerging entrants such as Perplexity AI. This tool, currently in its prototype stage, provides summarized search results with source links based on user queries, allows follow-up questions, and offers contextual responses. The introduction of SearchGPT has sparked considerable interest and partnerships with publishers like News Corp and The Atlantic, suggesting a significant shift in the digital search landscape. The goal is to integrate the most effective features from this search tool into ChatGPT. The service is marketed as a challenge to Google's market dominance, which held a 91.1% market share as of June, as reported by Statcounter. OpenAI's collaboration with publishers could lead to better content management and distribution.

  • 2-2. Capabilities and Features of Perplexity AI

  • Perplexity AI is an AI search engine chatbot company backed by Amazon founder Jeff Bezos and semiconductor giant Nvidia. One of the earliest AI search startups, Perplexity offers AI-generated search summaries instead of traditional link surfing. The company recently announced a revenue-sharing program with partners such as Fortune, Time, and WordPress.com, aimed at addressing concerns of plagiarism and legal threats from publishers like Forbes, Condé Nast, and Amazon. Perplexity's ad revenue-sharing program is seen as an olive branch to publishers and offers a more lucrative revenue model compared to Google's, which provides zero revenue split. Despite these innovations, Perplexity faces challenges, including significant operational costs and competition from giants like OpenAI and Google.

3. Technological Advancements and Market Impact

  • 3-1. GPT-4o and Other Emerging AI Models

  • In 2024, OpenAI released GPT-4o, its new flagship omni model for ChatGPT. GPT-4o, which features voice and vision capabilities, is considered the default free model. Additionally, OpenAI released a smaller AI model, GPT-4o mini, designed to be cheaper and faster while outperforming other small AI models on reasoning tasks involving text and vision. OpenAI is also developing different partnerships to leverage AI in various sectors, such as healthcare and bioscience with the Los Alamos National Laboratory. However, OpenAI faced controversies, such as pausing its Sky voice option in GPT-4o due to its resemblance to Scarlett Johansson's voice in 'Her' and dealing with internal drama, including the departure of co-founder Ilya Sutskever.

  • 3-2. Impact on Search Engine Market and Google’s Response

  • The introduction of AI-powered search engines like OpenAI’s SearchGPT has significantly impacted the search engine market. SearchGPT integrates with ChatGPT, utilizing AI models to fetch real-time, context-aware results from the web. Unlike traditional search engines, SearchGPT organizes the results in a conversational tone. It is currently being tested with select users and publishers for feedback. Google has responded by integrating AI into its search results with the Search Generative Experience (SGE) and AI Overviews, which provide quick overviews of results with relevant links. These developments signal a shift in the search engine landscape, making information retrieval more dynamic and interactive.

4. Partnerships and Collaborations

  • 4-1. OpenAI’s Partnerships with Publishers

  • OpenAI has made significant strides in forming partnerships with various publishers. This strategy is mainly driven by leveraging AI technologies like SearchGPT to foster collaborations that ensure a mutually beneficial relationship. For instance, integrating publisher content into AI responses adds value for users, while also promoting the visibility and reach of publishers. By sharing advertising revenue generated when publisher content is used in responses, OpenAI aims to maintain ethical standards and transparency, meeting both business objectives and compliance requirements.

  • 4-2. Perplexity’s Revenue-Sharing Program and Publisher Relations

  • Perplexity has introduced the Perplexity Publishers' Program, a revenue-sharing initiative designed to address previous criticisms of using copyrighted content without proper attribution. This program involves sharing advertising revenue with major media outlets such as Fortune, Time, Entrepreneur, and The Texas Tribune. When content from these publishers is referenced in Perplexity's AI-generated responses, the associated revenue is shared with them. The company pays partners based on a double-digit percentage of the ad revenue and offers several benefits, including free access to Online LLM APIs and an Enterprise Pro subscription with enhanced data privacy and security features. Additionally, Perplexity collaborates with ScalePost.ai to provide publishers with analytics on content citation frequencies. This program was partly inspired by X's ad revenue-sharing model and aims to support quality journalism while creating a sustainable business framework for Perplexity's future growth.

5. Ethical Concerns and Legal Challenges

  • 5-1. Backlash Over Data Scraping and AI Ethics

  • AI companies have been facing significant backlash over data scraping practices. Reddit CEO Steve Huffman has publicly demanded that companies like Microsoft compensate for using the site’s data to train their AI models. Reports indicate that Microsoft, as well as other AI companies like Anthropic and Perplexity, have been using data without proper agreements, sparking ethical debates. Midjourney banned Stability AI employees in March of this year for causing a system outage through data scraping activities. Additionally, Google-backed startup Runway faced accusations of scraping thousands of YouTube videos without authorization to train its AI models. Such practices have raised ethical concerns among content creators, companies, and individual users.

  • 5-2. Copyright Infringement Lawsuits and Compensation Models

  • Several AI companies have faced legal challenges and lawsuits over copyright infringements and data usage without consent. Notably, actress Scarlett Johansson sued OpenAI for using her voice likeness without permission. OpenAI responded by stating that the voice in question belonged to other actors, but it paused using the voice in its products out of respect for Johansson. Freelancer.com CEO Matt Barrie claimed that Anthropic was the most aggressive scraper of his website, which led to a complete blockade of Anthropic’s traffic. Such legal disputes highlight the urgent need for established compensation models and agreements to protect intellectual property and ensure fair use of data.

6. Conclusion

  • The development of AI-powered search engines such as OpenAI's SearchGPT and Perplexity AI represents a groundbreaking shift in the way information is accessed and utilized. These advancements offer significant enhancements to user experiences through the use of sophisticated AI models like GPT-4o, which brings improvements in voice and vision capabilities. Despite these technological innovations, AI companies encounter substantial ethical and legal hurdles, especially pertaining to data scraping and copyright issues. The adoption of revenue-sharing models by entities like Perplexity AI may foster improved relationships with content creators and publishers, promoting ethical content usage. However, sustaining these ventures in the long term will require addressing these ethical concerns and securing broader industry acceptance. The digital search engine landscape is poised for further evolution through continued technological advancements and responsive market strategies by key players like OpenAI and Google, who are progressively integrating AI into their services.

7. Glossary

  • 7-1. SearchGPT [Technology]

  • SearchGPT is an AI-powered search engine developed by OpenAI, designed to fetch and summarize information from the web in a conversational format, integrating advanced AI models like GPT-4 to enhance search accuracy and user engagement.

  • 7-2. Perplexity AI [Company]

  • Perplexity AI is a startup focused on disrupting the search engine market with AI-powered search capabilities. It offers a revenue-sharing model with publishers to address potential plagiarism concerns and to support the sustainability of quality journalism.

  • 7-3. GPT-4o [Technology]

  • GPT-4o is an advanced AI model developed by OpenAI, featuring capabilities in voice and vision. It represents a significant milestone in language processing and is integral to the functionalities of SearchGPT and other AI tools.

  • 7-4. Data Scraping [Practice]

  • Data scraping involves extracting data from websites without explicit permission, raising ethical and legal concerns, particularly for AI training purposes. Various AI companies, including OpenAI, have faced backlash and lawsuits over these practices.

  • 7-5. Google [Company]

  • Google, a leading search engine provider, is impacted by the emergence of AI-powered search engines like SearchGPT. Regulatory scrutiny over its monopolistic practices and competition from AI-based technologies are reshaping its market dominance.

8. Source Documents