Good morning. When OpenAI unveiled SearchGPT last week, it was heralded as a direct challenge to Google. Wired called it OpenAI’s “direct assault” on Google; Business Insider called it a “declaration of war” against Google; Tom’s Guide called it a “direct threat” to Google … you get the picture.

I sat down with Jim Yu, the founder of veteran SEO company BrightEdge, to talk about SearchGPT as a challenger — or “direct assault,” if you will — to Google.

Read on for the full story.

— Ian Krietzberg, Editor-in-Chief, The Deep View

In today’s newsletter:

• ⛈️ AI for Good: Advanced weather prediction

• 💰 Report: The term ‘AI” may actually hurt company sales

• 📊 Apple, Amazon and AI, AI, AI

• 📱 Exclusive interview: SearchGPT won’t break Google’s dominance

AI for Good: Advanced weather prediction

Last year, researchers at Google DeepMind unveiled (and open-sourced) a new AI model for weather forecasting called GraphCast. This summer, that model accurately predicted the path of Hurricane Beryl — the earliest-forming category 5 hurricane on record — that made a very destructive landfall in Texas last month. 

The details: GraphCast is a deep learning model that was trained on decades of historical weather data; researchers said that it can more accurately predict weather up to 10 days in advance. 

• Though the training process was “computationally intensive,” the model is now able to make its forecasts in minutes, compared to the hours of supercomputing required by current non-AI methods. 

Why it matters: With extreme weather becoming more common, the researchers behind GraphCast said that it is crucial for us to be equipped with faster and more accurate forecasting. They said better forecasting can help with preparedness and save lives. 

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Report: The term ‘AI’ may actually hurt company sales

AI expert Sol Rashidi told me last month that “AI can be overkill and sometimes AI is not the answer.” 

We were talking about the backlash that has been forming against a world of encroaching AI generation, with services, apps and companies beginning to promise safe havens from genAI. 

A new study from Washington State University adds some weight to this environment. 

The details: The study, which conducted experimental surveys with U.S. adults, found that products described as using “artificial intelligence” were less popular than those without the buzzword. 

• “When AI is mentioned, it tends to lower emotional trust, which in turn decreases purchase intentions,” Mesut Cicek, the study’s author, said in a statement. “We found emotional trust plays a critical role in how consumers perceive AI-powered products.”

• The researchers tested eight different product and service categories, finding that the negative reaction was even stronger for higher-risk products and services. 

“It’s a disadvantage to include those kinds of terms in the product descriptions,” Cicek said.

• Leaf, a startup focused on providing data insights to the agriculture industry, raised $11.3 million in a Series A funding round.

• Hyperbolic Labs, an AI infrastructure startup, raised $7 million in seed funding.

• US progressives push for Nvidia antitrust investigation (Reuters).

• Microsoft says OpenAI is now a competitor in AI and search (CNBC).

• A first look at Apple Intelligence and its (slightly) smarter Siri (The Verge).

• AI Startup Suno Says Music Industry Suit Aims to Stifle Competition (Bloomberg).

• India’s star audio content company is going all in on AI. Will listeners tune in? (Rest of World).

Apple, Amazon and AI, AI, AI

Apple and Amazon finished off this week of Big Tech earnings Thursday night. 

Apple notched sales of $85.78 billion for the quarter, beating analyst expectations to deliver earnings of $1.40 per share. Shares of Apple lifted slightly in after-hours trading.

Amazon missed expectations on revenue of $147.98 billion for the quarter, though Amazon Web Services — a key metric for investors — beat expectations with $26.3 billion in revenue. Shares of Amazon slid around 7% in after-hours trading. 

The AI of it all: Apple confirmed its plan to release Apple Intelligence in a staggered wave and Amazon said AWS continues to be “customers’ top choice” as companies seek to build and develop cloud infrastructure and generative AI technology. 

• Deepwater’s Gene Munster said that the “AI train continues to move forward. Near-term capex spend is a leading indicator to how transformative AI will be over the long term.” 

• And like many other investors, Global X’s Tejas Dessai said that the “AI-driven device upgrade cycle is likely to catalyze even further gains for Apple.” He said that AI-based monetization is “clearly scaling up.”

Apple CEO Tim Cook said that the company can’t yet speak about the financial impact of Apple Intelligence, but he told CNBC that Apple has boosted its spending to get things ready. 

The S&P 500, Nasdaq and Dow Jones Industrial Average all closed Thursday in the red. 

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Exclusive interview: SearchGPT won’t break Google’s dominance

Last week, OpenAI unveiled its long-awaited answer to Search: SearchGPT. 

The prototype will be rolling out slowly, being made available only to 10,000 test users at launch. 

It is a cautious approach that comes as scrutiny into AI search startup Perplexity has been steadily rising. OpenAI was careful to say that SearchGPT will provide users with clear, relevant links to the information it provides. 

And though SearchGPT has been heralded as OpenAI’s big challenge to Google, Jim Yu, the founder of SEO company BrightEdge, thinks Google’s dominance is too established to break. 

Why Google’s dominance likely isn’t changing: One of the key metrics BrightEdge has been tracking for the past 15 years involves referral traffic from different search engines. Yu told me that Google’s share of that market has remained above 90%, even with Perplexity experiencing a 30% month-over-month growth in June. 

• Part of the reason behind Google’s dominance is muscle memory, but another reason, according to Yu, is its breadth. 

• “One of the things that people underestimate is the sheer number of use cases that Google covers,” he said. “The brilliance of keyword-driven search is it works for everything.”

The breadth of Google Search — its real-time integration with location services, maps and points of interest, for example — makes it a hard beast to challenge. Yu said that the AI Search startups won’t be able to beat Google at its own game; they’ll have to come up with something new. And in doing so, they could definitely eat away at some of Google’s market share. 

 “Google is still the dominant player. That hasn’t changed. But we see some movement in these different areas,” Yu said. 

How AI search will likely go: “What we’re going to see is the growth of new types of use-cases that are conversational and driven from search,” Yu said. 

• Trip planning is a perfect example of one of those use cases that could be won by an AI search engine. As it stands right now, planning a trip involves — at a minimum — dozens of Google searches. But in a conversational interface, hotels, airfare, car rentals and local area research could all take place in one search. 

• The challenge is that Google has its own AI for search — and it could very likely beat out the challengers on some of these new use cases. 

The key for these startups, Yu said, is identifying the “areas where AI can really create a fundamentally different kind of search experience where it can win in a way that's going to be very different from Google.” 

Though it has yet to be released, Yu thinks SearchGPT “actually (looks) really good” so far. 

For Yu, the key components of the demo involved a bit of uncharacteristic transparency on both referrals and the economic model, as well as some focus on OpenAI’s real-time index. 

• “I think they watched what was going on with Perplexity and they kind of said, ‘Hmm, let's not step into that,’” Yu said. 

“The bigger picture here is that the crown jewel of Search for Google has a lot of moats protecting it,” Yu said. “And so no, I don’t think it’s just going to topple. But I think you’re going to see new use cases, new consumer demand and new engines able to capture and innovate in a lot of those areas.”

A poll before you go

Thanks for reading today’s edition of The Deep View!

We’ll see you in the next one.

Your view on Friend:

A quarter of you think it’s a little creepy; around 20% of you think it’s a horrifying, dystopic hellscape. Fewer than 20% of you would be down to try it and less than 1% of you think it sounds amazing.

Something else:

• “Indicative of spiritually vapid society, where spiritual adepts still exist and have the answers to all ills if you look for them, but few look for them.”

Horrifying dystopic hellscape:

• “This is not technology that is leading toward improved quality of life or human connection but is instead an enticing pseudo-human experience for those who have never learned to relate to others in a human way because they have only done so through machines. Perhaps they will find fulfillment in this. I suspect not and those around them will bear the brunt of it.”

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