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How AI is Disrupting Google, IBM, and Chegg: This Week’s Top Tech News

May 5, 2023
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It's been another busy week in A.I. and tech as Google, IBM, Microsoft and Samsung all hit the headlines. Meanwhile, the edTech sector suffered a major blow as Chegg stocks plummeted due to students' preference for ChatGPT. The first major scalp of the GPT era? Read on for all the week's biggest stories.

“Godfather of A.I.” quits Google and issues stark warning

Geoffrey Hinton, often referred to as one of the "Godfathers of AI" and a 2018 Turing Award winner, stepped down from his position at Google. This decision was made so that Hinton could freely discuss the potential risks and pitfalls associated with artificial intelligence, a field in which he played a significant role in shaping.

Hinton expressed remorse over the unforeseen consequences of his life's work, acknowledging the challenges in preventing bad actors from exploiting AI technology for malicious purposes. He had been content with Google's management of AI advancements until Microsoft introduced its OpenAI-powered Bing search engine. This move directly threatened Google's core business and triggered a "code red" response within the company.

The intense competition between tech giants, Hinton argues, could result in a world inundated with fake imagery and text, making it nearly impossible for anyone to discern the truth. On a larger scale, Hinton fears that AI-driven automation will eventually eliminate not only mundane jobs, but also potentially humanity itself, as AI systems become capable of creating and managing their own code.

For Hinton, the immediate concern is the spread of misinformation facilitated by increasingly advanced AI technology. However, his broader concerns serve as a reminder of the ethical and societal responsibilities that accompany the development of powerful artificial intelligence tools. As AI continues to shape our world, it's crucial for researchers, developers, and policymakers to take these potential consequences into account and strive to create a more responsible and balanced AI ecosystem.

IBM announces plans to replace 7,800 jobs with AI

IBM has unveiled its ambitious plan to eventually replace 7,800 jobs with artificial intelligence technology and put a temporary halt on hiring for specific positions. In a recent Bloomberg news report, IBM CEO Arvind Krishna shared that the company will be suspending or slowing down hiring in back-office functions like human resources, impacting approximately 26,000 non-customer-facing roles.

Krishna believes that certain tasks are likely to be completely automated in the future, while others might not face replacement for another decade or so. Despite the projected workforce reduction in some areas, IBM is still actively hiring for positions in software development and customer-facing roles. In the first quarter alone, the tech giant added about 7,000 new employees to its current roster of 260,000 workers.

IBM's latest financial quarter saw profits exceeding estimates, largely due to strategic expense management. This included job cuts announced earlier, which have contributed to the company's overall financial success. Looking forward, IBM's CFO James Kavanaugh has revealed plans for implementing new productivity and efficiency measures. The goal is to achieve a whopping $2 billion in annual savings by the end of 2024.

While IBM's decision to replace jobs with AI technology may seem daunting, it also signals a shift towards a more technologically advanced and efficient workforce. As the company continues to hire for software development and customer-facing roles, it's evident that the human element remains an important aspect of IBM's long-term strategy.

Education giant Chegg’s shares plummet as ChatGPT gains popularity among students

Online education giant Chegg recently revealed that the rapid rise in popularity of ChatGPT, an advanced AI language model, is taking a toll on its growth. CEO Dan Rosensweig shared that the company has witnessed a significant surge in student interest in ChatGPT since March, which is negatively affecting their new customer growth rate.

This has led to a disappointing quarterly revenue projection for Chegg, with expectations set between $175 million and $178 million – falling short of the analyst consensus estimate of $193.6 million. The announcement caused a substantial drop in the company's shares, with a 48% decline to $9.01 during Tuesday trading.

Market analysts are taking note of the threat that artificial intelligence poses to the education sector. Morgan Stanley and Jefferies both lowered their price targets for Chegg in response to the emerging AI competition.

To counter this threat, Chegg is working on its own AI solution, CheggMate, in partnership with OpenAI – the very same organization responsible for developing ChatGPT. However, the success and impact of CheggMate remain uncertain, with Jefferies analyst Brent Thill suggesting that any potential influence may not be visible until FY24 at the earliest.

As the battle for AI supremacy in the education sector heats up, it will be fascinating to see how companies adapt and innovate to stay relevant and competitive.

Microsoft announces AI enhancements to Bing Chat

Microsoft has announced major enhancements to its search engine, Bing, with a strong emphasis on AI integration. At a recent preview event held in New York City, the tech giant unveiled a range of new features that will be added to Bing Chat, including more visually engaging and personalized answers, as well as the capacity to answer questions within the context of images.

Bing Chat, which is backed by OpenAI’s GPT-4 and DALL-E 2 models, has grown rapidly, now boasting over 100 million daily active users. The platform has facilitated more than half a billion chats and generated over 200 million images to date. Among the upcoming features, Bing Chat will provide image-based responses when appropriate, complete with citations to indicate the source of information. The AI-powered tool will also be able to generate charts and graphs when given the right prompt and data.

In addition to supporting more languages (over 100 in total), Bing Chat will soon be able to understand images alongside text. Users will have the option to upload images and search the web for related content. Furthermore, Bing Chat will store users' chat histories, allowing them to resume previous conversations whenever they wish.

To enhance user experience, Bing Chat is introducing export and share functionalities, enabling users to share their conversations on social media or even convert them into Word documents. Moreover, plugins from partners like OpenTable and Wolfram Alpha will significantly expand the capabilities of Bing Chat, making it an even more versatile and powerful tool for users.

Google “We have no moat”: leaked doc sheds light on battle between tech giants and open-source language models

A recent leak from an anonymous source has provided fascinating insights into the ongoing battle between tech giants Google and OpenAI, as well as the open-source community, in the realm of language models. The leaked document, verified as genuine, was shared on a public Discord server and is believed to have originated from a researcher within Google.

The document highlights that while Google and OpenAI have been focusing on competing against each other, the open-source community has made significant strides in creating language models that outperform both in terms of speed, customizability, privacy, and capability. It argues that Google's apparent lack of a "secret sauce" means it should take a page from the open-source community's book, learning from their successes and adopting a more collaborative approach.

Moreover, the document suggests that the focus on building ever-larger models is actually hindering progress. Instead, it posits that data quality is far more important than data size when it comes to driving innovation in the field. By prioritizing data quality, developers can create more efficient and effective language models.

The author concludes that trying to outdo the open-source community is a futile endeavor, and that Google would be better off positioning itself as a leader within that community. By embracing a cooperative stance and working alongside open-source developers, Google could ensure its long-term success and continued relevance in the rapidly evolving world of language models.

Shopify cuts workforce and sells logistics division

Shopify, the popular e-commerce platform, this week announced that it will be laying off 20% of its workforce, affecting more than 2,000 employees. This comes less than a year after the company had already reduced its workforce by 10%. In a surprising turn of events, Shopify has also decided to sell its logistics business to Flexport in exchange for approximately 13% of the company's stock.

In a candid blog post, Shopify's CEO, Tobias Lütke, referred to the logistics business as a "side quest" that had become a distraction from the company's primary operations. He emphasized the importance of focusing on Shopify's core product in order to stay competitive amidst the rapidly evolving AI revolution. By shedding the logistics division and streamlining its workforce, Shopify aims to adapt more effectively to the shifting landscape of e-commerce.

Shopify is taking steps to provide support for the employees affected by these layoffs. The company has committed to offering a minimum of 16 weeks severance pay, along with an additional week for each year of service at Shopify. Moreover, impacted employees will continue to receive medical benefits for the same duration as their severance pay.

This latest development marks a significant shift for Shopify as it refocuses on its core business and prepares for the challenges of an AI-driven future. It remains to be seen how the company will fare in the coming months, but with a leaner operation and a renewed focus, Shopify is poised to tackle the ever-changing world of e-commerce head-on.

WordPress axes Twitter integration over costly API fees

WordPress has decided to remove Twitter integration from its popular JetPack social sharing plugin. This move comes in response to Twitter's shift from free API offerings to expensive Enterprise subscription plans, with prices starting at a staggering $42,000 per month.

Automattic, the parent company of, announced that the Jetpack Social's Twitter connection will no longer function, putting an end to the automatic sharing of blog posts on the platform. Despite this setback, WordPress users can still enjoy Jetpack's social features with other social media giants like Facebook, LinkedIn, and Tumblr. Additionally, Automattic has plans to integrate Instagram and Mastodon with Jetpack Social in the near future.

The decision to drop Twitter integration follows similar moves by major companies such as Microsoft and Intercom. This loss is particularly significant for Twitter, given that WordPress powers approximately 43% of the entire web. With more than 5 million active installations, Jetpack is a popular choice for WordPress-based websites. Among those installations, 1.2 million sites had Jetpack Social enabled, and 120,000 active websites were sharing over 4.3 million blog posts to Twitter each month via Jetpack Social before the API changes took effect.

As Twitter faces the consequences of its decision to implement high-priced API subscription plans, it remains to be seen how this will impact their user base and partnerships with other major companies in the long run.

Samsung bans usage of AI tools on company devices

Samsung has put a temporary ban on generative AI tools, such as ChatGPT, for use on its company-owned devices. This decision comes in response to an internal data leak that occurred in April. The ban isn't limited to ChatGPT, but also includes services that utilize this technology, like Microsoft's Bing and Google's Bard.

This restriction is expected to be temporary, as Samsung works to implement security measures that will allow the safe use of generative AI to improve employees' productivity and efficiency. Alongside these efforts, Samsung is also reportedly developing its own in-house AI tools for software development and translation purposes.

It's important to note that this ban only applies to devices issued by Samsung to its employees and does not affect consumers or other Samsung device owners. The company initially permitted employees in its device solutions division to use generative AI from March 11th, but later requested that staff members using these tools outside of this division refrain from submitting any company-related information or personal data following the data leak.

Samsung emphasizes the difficulty of retrieving and deleting data on external servers, acknowledging that data transmitted to AI tools could potentially be disclosed to other users. Meanwhile, other prominent South Korean tech companies, such as LG and SK Hynix, are facing their own challenges in creating guidelines for the use of generative AI tools within their organizations.

Apple's billion-pound battery battle

Apple finds itself in the midst of a legal storm, as the tech giant faces a lawsuit in London potentially worth up to £1.6 billion, plus interest. The suit is led by consumer advocate Justin Gutmann, who represents UK iPhone users accusing Apple of concealing faulty batteries in millions of devices by "throttling" their performance with software updates. Gutmann's legal team contends that Apple hid issues with batteries in certain iPhone models and discreetly installed a power management tool that limited the devices' capabilities.

Apple, however, adamantly denies these allegations, calling the lawsuit "baseless" and maintaining that its power management update only reduced an iPhone 6's performance by an average of 10 percent. Gutmann is urging London's Competition Appeal Tribunal to certify the case and allow it to progress towards a trial.

Gutmann's lawyer highlights Apple's 2020 agreements to settle a US class action and regulatory action by US states over iPhone battery problems as evidence that Apple was not "saying this never happened." In 2019, Apple also pledged to be "clearer and more upfront" with iPhone users about battery health following discussions with Britain's competition watchdog.

Despite these previous commitments, Apple denies that it misled customers about iPhone battery issues. The company refers to a public apology it issued in 2017, where it offered cheaper battery replacements to affected customers as proof of its good faith. As the case unfolds, iPhone users around the world will undoubtedly be keeping a close eye on the outcome.


Tune in next week for more news from the ever-shifting world of A.I., tech, startups, marketing and more. Don't forget to sign up to receive instant updates in your inbox!

Marc Crouch
Marc Crouch
Writes about startups, strategy, growth marketing and technology. Occasionally rants about things, but usually in an entertaining way.