Alphabet CEO Sundar Pichai sat down with World Economic Forum founder Klaus Schwab to talk about the latest technology breakthroughs, the privacy concerns of data and the future plans of Google and it’s holding company Alphabet Inc.
There have been growing calls for regulation, and even breaking up of the Big Tech firms – with the top 5 being valued at a staggering $5 Trillion together – owing to the impact on society and democracy that they can pose.
Recently, a number of FAANG (Facebook, Apple, Amazon, Netflix, Google) representatives have been in the spotlight. Mark Zuckerberg and Sundar Pichai have both been called to congressional hearings in the last year as the spotlight swivels ever-closer to the market dominance, and abuse by the firms.
Although the conversation at the WEF on Wednesday felt like a highlight on Alphabet’s latest news, it did not take long for it to begin to feel like another grilling of Pichai.
More Profound than Fire
Saying that “AI is more profound than fire or electricity” for the human race was a bold first statement on artificial intelligence. Sundar Pichai is sober on the subject as “the biggest risk with AI may be failing to work on it, and make more progress because it can impact billions of people.”
Klaus Schwab noted that in the last 30 years one of the most important moments in technology progression was DeepMind’s (owned by Alphabet) AlphaGo AI beating the (human) grand champion at the ancient game of Go and that “Google was at the forefront of another revolution.” The elephant in the room? Quantum computing.
Beaming in agreement, Pichai proudly proclaimed that “last year we achieved what is known in the field as ‘Quantum Supremacy’” – when a quantum computer is able to perform a task that classical computers cannot.
Injecting a little bit of philosophy into the conversation about an innovation set to shake up the world as we know it, he contemplated that “to me nature, at a fundamental level, works in a quantum way. In a subatomic level, things can exist in many different states at the same time. Classical computers work in 1’s and 0’s so we know that is an imperfect way to assimilate nature.”
“Nature works differently. Why we are so excited about the possibilities is it will allow us to assimilate nature in a deeper way. That means assimilating molecular structures, maybe discover better drugs, understand climate in a deeper way so we can predict weather patterns in a better way, design better batteries.”
Read: An overview of the technology that is Quantum Computing, where it is being used and how all current encryption methods could become obsolete.
One reason the IT community is excited for the rule of quantum is it could restart Moore’s Law, the 40-year old concept that computer power doubles every two years (which has slowed recently).
Google’s CEO also had some sobering news for the security industry as well – “in a 5 to 10-year timeframe quantum computing will break encryption as we know it today”, but that not to worry as the solution for that will be “quantum encryption”. Talk about a digital arms race.
“The combination of AI and quantum will help us tackle some of the big problems” but that “it has real negative consequences to it, when you look at facial recognition technology it can be to used to benefit, to find missing people, and it can be used for mass surveillance.”
Google has certainly enjoyed the benefits as Alphabet stock, a major composite of the Nasdaq 100 Index (8.6% weighting), is up 8.5% Year-To-Date. Alphabet recently attained a $1 Trillion market cap on the 16th of this month, becoming the 4th publicly traded US company to do so.
Fears in society are growing of a matrix-terminator-IRobot takeover. But Pichai is looking to make sure Alphabet’s artificial intelligence “serves society; that means making sure AI doesn’t have bias, that we build and test it for safety, we make sure there is human agency- ultimately accountable to people.”
The Policy of Privacy
Alphabet’s revenue stream continues to be heavily dominated by advertisements paid to Google- owing to the search engine being able to track a user as it moves though the web. This means that Alphabet is entirely beholden to Google Search and if that starts to slip, so too could the $Trillion.
Big bucks are not the only thing that a 93% market share in the search engine sector of the digital economy brings. Alphabet has found itself battling fines across the world due to privacy blunders.
Some startups are beginning to challenge this stranglehold dynamic, such as the Brave Ad and tracker-blocker browser. Instead of commodifying user attention – with the benefit totally skewed towards Google and the advertiser – Brave seeks to compensate the user for their time via the BAT cryptocurrency.
Read: the Brave browser taking on the commodification of data, time and attention here.
The World Economic Forum conversation therefore inevitably turned towards the subject of privacy and the methods by which consumer data is handled. Klaus Schwab opened the grill and turned the heat to max.
“When you look at GDPR and the California Consumer Privacy Act, regulators are starting action to protect consumer privacy and address it. And the growing anti-trust concerns, of Google buying up all startups which are in AI. Can you share with us what is the policy on privacy and anti-trust?”
This not being Pichai’s first rodeo he had some ammunition ready. “GDPR has been a great template. I think it gives a standardized framework” and that he was “glad Europe took the lead on it and it gives us all a good framework to work on.”
However, some might posit that Google is not quite working as hard as it could on following privacy guidelines, having been fined €50 million by the French data regulator CNIL, for a breach of the EU’s data protection rules (GDPR) last January and a $170 million fine by the Federal Trade Commission in the United States over YouTube’s (another Google-owned entity) breach of data guidelines on children in September last year. Pichai’s “for us, privacy is at the heart of what we do” claim fits well, but not in the most positive of contexts.
But those figures are dwarfed by the fines metered out from anti-trust violations. Business Insider’s story that ‘Google fined $1.7 billion over a 3rd breach of EU antitrust rules in 3 years’ seems to have the sound of a disappointed parent in a disobedient child.
Different Structures for Other Bets
Google and Alphabet are poised to be going in different directions in the future. In closing the session, Schwab asked about the future direction of the company – “Is it a giant which sucks up everything? How do you see Google in 5 years from now?”
The CEO emphasized that Google can only grow so long as the business communities do too, “businesses grow along with search. In the US alone last year we created $300 Billion of economic opportunity.”
That was a strong pitch at how Google Search is helping generate jobs but the interesting parts of the holding company revolve around Sundar Pichai projecting the thought that “with Alphabet there is a real chance to take a long-term view and work on technology which can improve people’s lives.”
“The other bets which we are working on, where we can we take outside investments. These companies are private so you can imagine we will do it in partnership with other companies and Alphabet gives us the flexibility to have different structures for different areas.”
Those Other Bets he mentioned are a variety of new startups that are changing the world in innovative new ways, and more importantly to Alphabet, offer avenues of future revenue where it can diversify from the cash cow of Search. Some of those Bets are overviewed below.
The first is a throw at the coming nature of transport. Waymo began as Google’s self-driving car project, nd the startup has become one of the most advanced of the United States’ vehicle tech firms. But going toe-to-toe with the likes of Uber, Lyft and Tesla will be no easy feat.
One ‘bet’ that is also taking the competition to other Big Techs like Amazon is the solution being delivered by Wing Aviation, literally. The drone delivery service is already being used by FedEx and Walgreens in the USA, having begun operations in the last few months.
Loon is a particularly novel innovation which is geared towards providing network access to remote parts of the world where it would otherwise be too expensive with traditional methods. Loon engineered floating giant, solar-powered helium balloons. In the last few years the startup has been instrumental in helping post-disaster areas such as Puerto Rico in replacement cell access.
“a real chance to take a long-term view and work on technology which can improve people’s lives.”
Another independent Alphabet unit that is also looking to solve carbon emission issues is Makani Technologies. Makai utilizes kites with propellers to harness wind power. It has recently partnered with Royal Dutch Shell (Shell), inarguably the kind of organizations that desperately need a change, to offer commercial versions of the kite.
Moving through to science and health, Verily is the lifestyle unit that focuses on innovations such as wearable devices, surgical robots and retina scanning. By leveraging machine learning the healthcare industry has shown a faster detection of diseases, better surgical operation success and higher drug potencies.
The city of Toronto has been at the forefront of one of Alphabet’s most advanced Internet of Things (IoT) initiatives with the beginning of the ‘Smart City’ by Sidewalk Labs – a holistic technology experience for the citizen with smart trash bins, tracking retail footfall to adapt shop size minute-by-minute and adaptive traffic lights. However, the city has since curbed the size of the development from the initial 0.7 square kilometers to just 0.045-sq-km over issues involving privacy, data collection and whether the project was in the best interests of citizens.
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Views above are those of the author and do not necessarily represent the stance of DisruptionBanking or its partners.
By Ignatius Bowskill-Dutkiewicz
