‘Everything is becoming more split': the global AI divide
Bigger than New York's Central Park, the estimated $US60 billion ($92 billion) project will be one of the most powerful computing hubs ever created when completed as soon as next year.
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AU Financial Review
12 hours ago
- AU Financial Review
‘Everything is becoming more split': the global AI divide
In May, Sam Altman, the chief executive of the artificial intelligence company OpenAI, donned a helmet to visit the construction site of the company's new data centre project in Texas. Bigger than New York's Central Park, the estimated $US60 billion ($92 billion) project will be one of the most powerful computing hubs ever created when completed as soon as next year.
West Australian
2 days ago
- West Australian
THE ECONOMIST: AI is killing the web. Can anything save it?
Around the beginning of last year, Matthew Prince started receiving worried calls from the chief executives of large media companies. They told Mr Prince, whose firm, Cloudflare, provides security infrastructure to about a fifth of the web, that their businesses faced a grave new online threat. 'I said, 'What, is it the North Koreans?',' he recalls. 'And they said, 'No. It's AI'.' Those executives had spotted the early signs of a trend that has since become clear: artificial intelligence is transforming the way that people navigate the web. As users pose their queries to chatbots rather than conventional search engines, they are given answers, rather than links to follow. The result is that 'content' publishers, from news providers and online forums to reference sites such as Wikipedia, are seeing alarming drops in their traffic. As AI changes how people browse, it is altering the economic bargain at the heart of the internet. Human traffic has long been monetised using online advertising; now that traffic is drying up. Content producers are urgently trying to find new ways to make AI companies pay them for information. If they cannot, the open web may evolve into something very different. Since the launch of ChatGPT in late 2022, people have embraced a new way to seek information online. OpenAI, maker of ChatGPT, says that around 800 million people use the chatbot. It is the most popular download on the iPhone app store. Apple said that conventional searches in its Safari web browser had fallen for the first time in April, as people posed their questions to AI instead. OpenAI is soon expected to launch a browser of its own. Its rise is so dramatic that a Hollywood adaptation is in the works. As OpenAI and other upstarts have soared, Google, which has about 90 per cent of the conventional search market in America, has added AI features to its own search engine in a bid to keep up. Last year it began preceding some search results with AI-generated 'overviews', which have since become ubiquitous. In May it launched 'AI mode', a chatbot-like version of its search engine. The company promises that, with AI, users can 'let Google do the Googling for you'. Yet as Google does the Googling, humans no longer visit the websites from which the information is gleaned. Similarweb, which measures traffic to more than 100m web domains, estimates that worldwide search traffic (by humans) fell by about 15 per cent in the year to June. Although some categories, such as hobbyists' sites, are doing fine, others have been hit hard. Many of the most affected are just the kind that might have commonly answered search queries. Science and education sites have lost 10 per cent of their visitors. Reference sites have lost 15 per cent. Health sites have lost 31 per cent. For companies that sell advertising or subscriptions, lost visitors means lost revenue. 'We had a very positive relationship with Google for a long time . . . They broke the deal,' says Neil Vogel, head of Dotdash Meredith, which owns titles such as People and Food & Wine. T hree years ago its sites got more than 60 per cent of their traffic from Google. Now the figure is in the mid-30s. 'They are stealing our content to compete with us,' says Mr Vogel. Google has insisted that its use of others' content is fair. But since it launched its AI overviews, the share of news-related searches resulting in no onward clicks has risen from 56 per cent to 69 per cent, estimates Similarweb. In other words, seven in ten people get their answer without visiting the page that supplied it. 'The nature of the internet has completely changed,' says Prashanth Chandrasekar, chief executive of Stack Overflow, best known as an online forum for coders. 'AI is basically choking off traffic to most content sites,' he says. With fewer visitors, Stack Overflow is seeing fewer questions posted on its message boards. Wikipedia, also powered by enthusiasts, warns that AI-generated summaries without attribution 'block pathways for people to access . . . and contribute to' the site. To keep the traffic and the money coming, many big content producers have negotiated licensing deals with AI companies, backed up by legal threats: what Robert Thomson, chief executive of News Corp, has dubbed 'wooing and suing'. His company, which owns the Wall Street Journal and the New York Post, among other titles, has struck a deal with OpenAI. Two of its subsidiaries are suing Perplexity, another AI answer engine. The New York Times has done a deal with Amazon while suing OpenAI. Plenty of other transactions and lawsuits are going on. (The Economist's parent company has not taken a public position on whether it will licence our work.) Yet this approach has limits. For one thing, judges so far seem minded to side with AI companies: last month two separate copyright cases in California went in favour of their defendants, Meta and Anthropic, both of which argued that training their models on others' content amounted to fair use. President Donald Trump seems to accept Silicon Valley's argument that it must be allowed to get on with developing the technology of the future before China can. He has appointed tech boosters as advisers on AI, and sacked the head of the US Copyright Office soon after she argued that training AI on copyrighted material was not always legal. AI companies are more willing to pay for continuing access to information than training data. But the deals done so far are hardly stellar. Reddit, an online forum, has licensed its user-generated content to Google for a reported $US60m ($AU91.5m) a year. Yet its market value fell by more than half — over $US20 billion — after it reported slower user-growth than expected in February, owing to wobbles in search traffic. (Growth has since picked up and Reddit's share price has recovered some lost ground.) The bigger problem however, is that most of the internet's hundreds of millions of domains are too small to either woo or sue the tech giants. Their content may be collectively essential to AI firms, but each site is individually dispensable. Even if they could join forces to bargain collectively, antitrust law would forbid it. They could block AI crawlers, and some do. But that means no search visibility at all. Software providers may be able to help. All of Cloudflare's new customers will now be asked if they want to allow AI companies' bots to scrape their site, and for what purpose. Cloudflare's scale gives it a better chance than most of enabling something like a collective response by content sites that want to force AI firms to cough up. It is testing a pay-as-you-crawl system that would let sites charge bots an entry fee. 'We have to set the rules of the road,' says Mr Prince, who says his preferred outcome is 'a world where humans get content for free, and bots pay a tonne for it'. An alternative is offered by Tollbit, which bills itself as a paywall for bots. It allows content sites to charge AI crawlers varying rates: for instance, a magazine could charge more for new stories than old ones. In the first quarter of this year Tollbit processed 15m micro-transactions of this sort, for 2000 content producers including the Associated Press and Newsweek. Toshit Panigrahi, its chief executive, points out that whereas traditional search engines incentivise samey content — 'What time does the Super Bowl start?', for example — charging for access incentivises uniqueness. One of Tollbit's highest per-crawl rates is charged by a local newspaper. Another model is being put forward by ProRata, a startup led by Bill Gross, a pioneer in the 1990s of the pay-as-you-click online ads that have powered much of the web ever since. He proposes that money from ads placed alongside AI-generated answers should be redistributed to sites in proportion to how much their content contributed to the answer. ProRata has its own answer engine, which shares ad revenue with its 500-plus partners, which includethe Financial Times and the Atlantic. It is currently more of an exemplar than a serious threat to Google: Mr Gross says his main aim is to 'show a fair business model that other people eventually copy'. Meanwhile, content producers are rethinking their business models. 'The future of the internet is not all about traffic,' says Mr Chandrasekar, who has built up Stack Overflow's private, enterprise-oriented subscription product, Stack Internal. News publishers are planning for 'Google zero', deploying newsletters and apps to reach customers who no longer come to them via search, and moving their content behind paywalls or to live events. Audio and video are proving legally and technically harder for AI engines to summarise than text. The site to which answer engines refer search traffic most often, by far, is YouTube, according to Similarweb. Not everyone thinks the web is in decline — on the contrary, it is in 'an incredibly expansionary moment', argues Robby Stein of Google. As AI makes it easier to create content, the number of sites is growing: Google's bots report that the web has expanded by 45 per cent in the past two years. AI search lets people ask questions in new ways — for instance, taking a photo of their bookshelf and asking for recommendations on what to read next — which could increase traffic. With AI queries, more sites than ever are being 'read', even if not with human eyes. An answer engine may scan hundreds of pages to deliver an answer, drawing on a more diverse range of sources than human readers would. As for the idea that Google is disseminating less human traffic than before, Mr Stein says the company has not noticed a dramatic decline in the number of outbound clicks, though it declines to make the number public. There are other reasons besides AI why people may be visiting sites less. Maybe they are scrolling social media. Maybe they are listening to podcasts. The death of the web has been predicted before — at the hands of social networks, then smartphone apps — and not come to pass. But AI may pose the biggest threat to it yet. If the web is to continue in something close to its current form, sites will have to find new ways to get paid for content. 'There's no question that people prefer AI search,' says Mr Gross. 'And to make the internet survive, to make democracy survive, to make content creators survive, AI search has to share revenue with creators.'
News.com.au
2 days ago
- News.com.au
Pentagon inks contracts for Musk's xAI, competitors
The Pentagon announced contracts on Monday with multiple leading US artificial intelligence firms including Elon Musk's xAI, which has faced intense scrutiny in recent days over anti-Semitic posts by its Grok chatbot. Each of the contracts to xAI, Anthropic, Google and OpenAI have a ceiling value of $200 million, the Pentagon's Chief Digital and Artificial Intelligence Office (CDAO) said in a statement. The awards will enable the Department of Defense "to leverage the technology and talent of US frontier AI companies to develop agentic AI workflows across a variety of mission areas," it said. The contract with xAI comes just days after the company was forced to apologize again for controversial posts by its Grok chatbot. After an update on July 7, the chatbot praised Adolf Hitler in some responses on the X social media platform, denounced "anti-white hate," and described Jewish representation in Hollywood as "disproportionate." xAI apologized for the extremist and offensive messages, and said it had corrected the instructions that led to the incidents. The release on Wednesday of Grok 4, the latest chatbot version, was almost met with scrutiny after it appeared to consult Musk's positions on some questions it was asked before responding. The contract between xAI and the Department of Defense comes even as Musk and President Donald Trump have publicly feuded in recent weeks. Musk, a top backer of Trump's most recent presidential campaign, was entrusted with managing the new agency known as DOGE to massively slash government spending under the current administration. After ending his assignment in May, the South African-born entrepreneur publicly criticized Trump's major budget bill for increasing government debt. The president and the businessman engaged in heated exchanges on social media and in public statements before Musk apologized for some of his more combative messages. - 'Critical national security needs' - The government and the defense sector are considered a potential growth driver for AI giants. Musk's xAI announced on Monday the launch of a "Grok for Government" service, following a similar initiative by OpenAI. In addition to the Pentagon contract, "every federal government department, agency, or office (can now) purchase xAI products" thanks to its inclusion on an official supplier list, xAI said. Meta meanwhile has partnered with the start-up Anduril to develop virtual reality headsets for soldiers and law enforcement. OpenAI had previously announced in June that it had secured a Defense Department contract with a ceiling of $200 million. "Establishing these partnerships will broaden DoD use of and experience in frontier AI capabilities and increase the ability of these companies to understand and address critical national security needs with the most advanced AI capabilities U.S. industry has to offer," said the CDAO statement on Monday.
