Google's AI Apology and OpenAI's Initiatives, N-Able Considers Sale, Cybersecurity Industry Boom

[00:00:02] It's Friday, May 31st, 2024, and I'm Dave Sobel. Three things to know today.

[00:00:07] Google apologizes for AI overview inaccuracies amid data voids and unusual theories.

[00:00:14] Enable considers a Tait private deal, Barracuda networks among the interested buyers, and

[00:00:20] the booming cybersecurity industry are solutions adding complexity without liability.

[00:00:26] This is the Business of Tech.

[00:00:28] Google has apologized for the rollout of AI overviews in a blog post.

[00:00:34] The company attributes the inaccuracies to data voids and people asking unusual questions.

[00:00:41] Google is working to fix the issue by limiting AI overviews for nonsensical queries and satire.

[00:00:48] The introduction of AI overviews has been a PR blunder for Google

[00:00:52] as it competes against OpenAI and other AI search startups.

[00:00:56] OpenAI is launching programs to make ChatGPT more accessible to schools and non-profit organizations.

[00:01:03] ChatGPT EDU is designed for universities,

[00:01:06] offering improved multimodal capabilities and enterprise-level security.

[00:01:11] Non-profits can access GPT Team at a discounted rate,

[00:01:15] and larger organizations can get ChatGPT Enterprise at a 50% discount.

[00:01:21] These initiatives come amidst recent resignations and controversies at OpenAI.

[00:01:26] Free ChatGPT users now have access to custom GPTs,

[00:01:30] data analytics, chart creation, and other features previously available only to paid subscribers.

[00:01:36] While they can use custom existing GPTs, they cannot create their own.

[00:01:41] Paying subscribers still have the advantage of fewer message limits.

[00:01:45] The controversial Sky voice has been removed.

[00:01:48] Other voices are still available on ChatGPT.

[00:01:52] And all this investment in AI may pay off just for performance.

[00:01:56] Microsoft conducted benchmarks comparing its new Surface laptop to the MacBook Air M3,

[00:02:02] showcasing better performance in Cinebench and Geekbench tests.

[00:02:06] The Surface laptop outperformed in a handbrake TOS benchmark

[00:02:11] and demonstrated longer battery life in web browsing and video playback simulations.

[00:02:16] Additionally, Microsoft highlighted the superior NPU performance

[00:02:20] and efficiency of its Snapdragon X Elite processor.

[00:02:24] These benchmarks provide insights into the upcoming launch of Microsoft's Copilot Plus PCs.

[00:02:30] According to Gartner, revenue from AI semiconductors is projected to reach

[00:02:35] $71 billion this year, with a 33% increase from 2023.

[00:02:40] AI server accelerators are expected to reach $21 billion in value

[00:02:45] by 2024 and $33 billion by 2028.

[00:02:49] AI PC shipments are forecasted to reach 22% of total PC shipments this year,

[00:02:56] and by the end of 2026, all enterprise PC purchases will be AI PCs.

[00:03:02] AI chip revenue from computer electronics is projected to account

[00:03:06] for 47% of total AI semiconductor revenue this year.

[00:03:11] Why do we care?

[00:03:13] Even if the AI boom doesn't result in software advancements,

[00:03:16] the advancement of processors will still be significant.

[00:03:19] I wanted to note Google and OpenAI's missteps here

[00:03:22] —Google for the obvious reasons of messing absurd,

[00:03:24] and OpenAI for not finding the right balance of paid versus free in their freemium mom.

[00:03:30] That said, note they're targeting sectors too,

[00:03:34] and this is not the first time we've covered the non-profit space recently.

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[00:04:28] Reuters is reporting that Enable, with a market value of $2.5 billion,

[00:04:35] is exploring a sale after attracting acquisition interest.

[00:04:39] The sales process involves software sector peers and private equity firms,

[00:04:43] with cybersecurity company Barracuda Networks, owned by KKR, among the suitors.

[00:04:49] Enable was spun out from SolarWinds in 2021 and counts Silverlake and Tama Bravo as major investors.

[00:04:56] Take private deal volumes have increased, with education software firms PowerSchool

[00:05:02] and Instructure also in talks for a sale. Enable's shares rose over 8% on the news.

[00:05:09] Michael Novanson on Bank Info Security offered that this is a good match,

[00:05:13] with Enable bringing MSP tools and Barracuda bringing tools better regarded by technology

[00:05:19] analysts.

[00:05:20] Quote,

[00:05:42] Channel Futures offered canalized insights in that Enable could be an attractive acquisition

[00:05:48] target, potentially impacting the remote monitoring and management market.

[00:05:52] However, selling now could be premature, as Enable has a broad portfolio and has initiated an

[00:05:58] interesting ecoverse strategy.

[00:06:02] Why do we care?

[00:06:03] So, disclosure, I am an Enable shareholder.

[00:06:07] Let's start with the headline,

[00:06:08] Investors make a change like this because something isn't working.

[00:06:12] So the headline is, Enable isn't cutting it as a public company.

[00:06:16] I'm afraid I can't agree with Canalys here.

[00:06:18] It's not premature.

[00:06:20] They're the third place player in the market with upsurge at their heels and little to

[00:06:24] stand up from the crowd.

[00:06:26] For my money, another private equity reshuffle isn't necessarily the answer.

[00:06:31] That said, my money is over on customer value creation, and I don't expect KKR,

[00:06:37] Tama Bravo, or Silveroik to be in the same business I'm in.

[00:06:41] TIME TO BRING IN THE WEEKEND WITH THE FRIDAY BIG IDEAS

[00:06:46] MIT Technology Review addresses why Google's AI overviews get things wrong.

[00:06:52] The system uses the generative AI model Gemini, integrated with Google Core Web Ranking systems,

[00:06:58] to generate responses based on relevant information sources.

[00:07:02] These systems can sometimes provide incorrect information due to the inherent limitations

[00:07:07] of large language models and retrieval-augmented generation techniques, or RAG.

[00:07:13] LLMs predict the next word based on statistical calculations which can lead to inaccuracies.

[00:07:19] While RAG can check specific external sources, it can still generate incorrect responses if

[00:07:25] it fails to retrieve or generate information correctly.

[00:07:29] Misinformation is especially prevalent in specific topics,

[00:07:32] and cases where high-quality information is not readily available.

[00:07:38] CIO Dive with a reminder in the article,

[00:07:41] Cyber Attacks Are Good For Security Vendors And Business Is Booming

[00:07:45] The cybersecurity industry has experienced significant growth,

[00:07:48] with global spending on security and risk management projected to reach $215 billion this year.

[00:07:54] Cybersecurity vendors develop defenses to mitigate attacks while highlighting

[00:07:59] cybercriminal activity to demonstrate their value.

[00:08:02] However, experts argue that the industry's focus on selling expensive solutions

[00:08:07] instead of practical ones adds unnecessary complexity.

[00:08:11] Despite efforts to improve security, cyber threats and attacks continue to rise,

[00:08:16] emphasizing the only need for cybersecurity measures.

[00:08:20] I also want to ponder runtimes.

[00:08:22] Future of the cloud looks nuclear.

[00:08:25] So first some context.

[00:08:26] U.S. data center power consumption is projected to double by 2030

[00:08:31] due to the increasing demand for generative AI.

[00:08:34] The Electric Power Research Institute predicts that by 2030,

[00:08:38] data centers could consume nearly 9% of U.S. electricity generation.

[00:08:44] Nuclear reactors offer a constant and reliable stream of electricity

[00:08:48] that can supplement other renewable sources.

[00:08:50] However, building nuclear plants in 21st century America is challenging.

[00:08:55] The White House has supported the nuclear revival, which could lead to regulatory changes.

[00:08:59] The increasing demand for data centers, especially AI workloads,

[00:09:03] is putting a strain on the power grid.

[00:09:05] Tech companies like AWS are showing interest in nuclear power,

[00:09:09] and small modular reactors are being considered.

[00:09:12] Fusion energy is also being explored as a clean and scalable option.

[00:09:16] However, fusion technology is still in the early stages

[00:09:19] and has not been proven at a commercially relevant scale.

[00:09:22] And finally, want insight into Sam Altman's firing at OpenAI?

[00:09:27] Former OpenAI board member Helen Toner explains why Sam Altman was fired,

[00:09:31] citing reasons such as his failure to disclose ownership of the OpenAI startup fund,

[00:09:36] providing inaccurate information about safety processes,

[00:09:40] and engaging in manipulative and retaliatory behavior.

[00:09:43] The board decided to oust Altman after hearing from executives

[00:09:47] who described a toxic atmosphere and provided evidence of his misconduct.

[00:09:53] Despite some employees and Microsoft supporting Altman's return,

[00:09:57] Toner believes the pressure to reinstate him stemmed from limited options and fear of retaliation.

[00:10:03] She also highlights Altman's track record of problematic behavior in previous roles.

[00:10:09] Why do we care?

[00:10:11] Learning from the Google experience is an insightful lesson on how these products work.

[00:10:16] It's recommended reading.

[00:10:18] As an IT service provider, consider for a moment

[00:10:20] if you're addressing the cybersecurity problem for your customers

[00:10:24] or lining the pockets of the cybersecurity industry.

[00:10:27] You hold no liability.

[00:10:30] If you don't have liability, you don't hold responsibility.

[00:10:34] The others I'll leave for you to ponder.

[00:10:36] All those data centers will need a lot of power.

[00:10:51] Have a question you want answered?

[00:10:52] We take those lists of questions, send them in,

[00:10:54] ideally as a voice memo or video to question at msbradio.com.

[00:10:58] We'll answer them live on the Wednesday live show, YouTube and LinkedIn, 3 p.m. Eastern.

[00:11:03] This weekend, you'll get a bonus episode by interview with Don Snyder from William & Mary

[00:11:10] talking about how you and your organization can partner with higher education.

[00:11:14] Have a great weekend, and I'll talk to you again on Monday.

[00:11:18] The Business of Tech is written and produced by me,

[00:11:21] Dave Sobel, under ethics guidelines. Posted at businessof.tech.

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[00:11:56] Once again, thanks for listening to me.

[00:11:58] I will talk to you again on our next episode of the Business of Tech.