The key point of Google’s “we have no moat” memo on generative AI is that ecosystems are the moat
A few weeks ago, an internal memo from Google (or so it was claimed) was leaked that warned, “We have no moat.” Allegedly, it was written by an AI researcher at the company who was explaining how the real competitive threat to Google’s generative AI initiatives wasn’t OpenAI. It was open source communities.
If you want to understand the enormous power of ecosystems — and if you’re in martech, this may be the most important topic of your career — there’s a true masterclass in the subject playing out in front of us.
A super short summary of that memo: while Google and OpenAI were busy investing in their own massive but “closed” large language models (LLMs) with Bard and ChatGPT, a foundation model from Meta — LLaMA — was released/leaked as open source. Within a matter of weeks, hundreds of independent developers all around the world built upon that model in ways that rapidly approached the performance of Bard and ChatGPT, but at a fraction of the cost. They found ways to make the model smaller, run on laptops and even mobile phones, accelerate training and tuning, and more.