Banananomics: AI Technology is the New Superweapon

Spearheaded by big tech and venture-backed startups, AI has become the new superweapon for global power.

Inputs that matter: "If tech companies, including Google and Amazon, are engaged in business activities that could impact Palestinians in Gaza, or indeed Palestinians living under apartheid in general, they must abide by their responsibility to carry out heightened human rights due diligence along the entirety of the lifecycle of their products," said Matt Mahmoudi, a researcher at Amnesty International.

• "This must include how they plan to prevent, mitigate, and provide redress for possible human rights violation, particularly in light of mandatory relationships with weapons manufacturers, which contribute to the risk of genocide."

• An April 3 report by +972 Magazine found that the Israeli military was using Google Photos' facial recognition to map, identify, and create a "hit list" of Palestinians in Gaza; Google would not say whether it allowed this use of its software.

The opportunity: Google offers Palantir Foundry access to its cloud customers.

• The Israeli military extensively uses Palantir software for targeting in Gaza, veteran national security journalist James Bamford reported recently in The Nation.

• Foundry is AI software used by military forces, including U.S. Special Operations Command and the U.K. Royal Navy.

• Palantir has been an outspoken champion of the Israeli military's invasion of Gaza. "Certain kinds of evil can only be fought with force," the company posted on its social media during the first week of the conflict. "Palantir stands with Israel."

Zoom in: Both Google and Amazon say their work is guided by the United Nations Guiding Principles on Business and Human Rights, which seeks to "to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts."

• Michael Sfard, an Israeli human rights attorney, told The Intercept that these guidelines dictate that Google and Amazon conduct human rights due diligence and vet the Israeli government's use of their technology.

• "Without such a deep and serious process," Sfard said, "they can be seen as complicit in Israeli crimes."

Between the lines: The Intercept confirms that Google offers advanced artificial intelligence through its controversial "Project Nimbus" contract.

• The Israeli Finance Ministry announced in April 2021 the contract for a $1.2 billion cloud computing system jointly built by Google and Amazon.

• "The former head of Security for Google Enterprise—who now heads Oracle's Israel branch—has publicly argued that one of Nimbus's goals is preventing the German government from requesting data on the Israel Defence Forces for the International Criminal Court," said Jack Poulson, director of the watchdog group Tech Inquiry.

Follow the money: The U.S. House of Representatives recently passed a $95 billion legislative package for Ukraine, Israel, and Taiwan.

• While much of that money ultimately goes to traditional defense contractors such as RTX Corporation (NYSE: RTX), formerly Raytheon, and General Dynamics Corp (NYSE: GD), who are both trading at record highs, funds will also funnel to Big Tech and the rising need for AI on the battlefield.

• U.S. venture capital investment in defense startups has doubled in four years.

While lawsuits mount against OpenAI, the company is quietly working on a Microsoft Bing-enhanced search product that will intensify its competition with Google.

Inputs that matter: In a recent podcast with Lex Fridman, OpenAI chief Sam Altman said, "The intersection of LLMs plus search, I don't think anyone has cracked the code yet. I would love to do that. I think that would be cool." 

• Moreover, he said that OpenAI does not want to build another Google Search. "I find that  (Google Search) boring. I mean, if the question is if we can build a better search engine than Google or whatever, then sure, we should."

• "Google shows you ten blue links, 13 ads, and then ten blue links, and that's one way to find information. But the thing that's exciting to me is not that we can build a better copy of Google Search, but that maybe there's just a better way to help people find, act on, and synthesize information," Altman concluded.

• The rumor that OpenAI is launching a competing search engine was published on February 14.

• The next day, February 15, Google announced the launch of Gemini 1.5, following the announcement of Gemini Advanced on February 8.

The opportunity: OpenAI's Google Search alternative is expected to be released before Google I/O, scheduled for May 14, 2024.

• Search Engine Journal asks, "If OpenAI is challenging Google Search, what exactly is left for OpenAI to do that Microsoft isn't already doing with Bing Chat?"

• ChatGPT is the fastest-growing app of all time, currently with about 180 million users, and has achieved in two months what took years for Facebook and Twitter.

• Yet despite that head start, Google's lead is a steep hill for OpenAI to climb.

• Google has approximately 3 to 4 billion users worldwide, dwarfing OpenAI's 180 million users.

Zoom in: Multiple signals validate the rumors of OpenAI launching its search engine.

• The first is that search.chatgpt.com is showing in the log files for some servers, and also, yesterday, there were more business-oriented rumors of OpenAI launching a search engine on May 9.

• OpenAI's decision to launch a search app follows Microsoft CEO Satya Nadella's statement a year ago, saying that he would "make Google dance" by integrating OpenAI's GPT models into Microsoft's Bing search engine.

• A powerful new chatbot that showed up briefly on a testing site this week, stirring buzz among AI experts and enthusiasts, is likely from OpenAI.

• On Wednesday at Harvard University, Altman told an audience that the mystery bot is not GPT-4.5, which many see as the likely next major update to GPT-4.

Between the lines: Eight prominent U.S. newspapers owned by investment giant Alden Global Capital are suing OpenAI and Microsoft for copyright infringement in a complaint filed Tuesday in the Southern District of New York.

• On top of a similar case filed by the New York Times against both companies, the new suits add heft to publishers' claims.

• Until now, the Times was the only major newspaper that had taken legal action against AI firms for copyright infringement.

• Many other news publishers, including the Financial Times, the Associated Press, and Axel Springer, have instead opted to strike paid deals with AI companies for millions of dollars annually, undermining the Times' argument that it should be compensated billions of dollars in damages.

Follow the money: Both Google and Microsoft are doing well on Wall Street. Whether the rumor of OpenAI and Microsoft launching a new search product is true, expect the market to react in one way or another as we approach May 14.

• Microsoft Corp [NASDAQ: MSFT] is trading slightly below its all-time high from March 21, 2024.

• Alphabet Inc [NASDAQ: GOOG] is trading near its all-time high.

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