Neeva's Demise: The End of an AI Search Engine Era

0:00OpenAI launched the official ChatGPT app on the Apple App Store. And while, you know, that might not seem like an incredibly revolutionary thing to a lot of people, I mean, I for one have been using the ChatGPT app on my phone for the last couple months. I just have it logged in and I just use it in the web browser. But there are a lot of big changes and I think a lot of really big implications of this. So today on the podcast, we're going to be diving into what exactly this means for the industry in AI, what I think is going to happen because of it, and why Apple is going to be one of the biggest winners in this situation.

0:32So the first thing I want to say is the fact that Apple makes about 30 % on in-app purchases on all apps on their app store. And while they recently did lose a lawsuit or there was a judge that ruled that developers did have the ability to send a user to a web browser to make a purchase off the app, which is a really big thing in the whole industry. OpenAI is not doing this. Maybe because it's a little bit more clunky. maybe because, you know, it just doesn't seem like it has as much trust. But for whatever reason, this is going to be a massive way that I believe Apple is going to make a lot of money.

1:12And if we just kind of like think about the numbers for a second, if ChatGPT is going to go and add, let's say, 5 million new subscribers on iOS this year, that's going to equate to around$1.2 billion in annual revenue. And I don't think this number is too crazy considering, you know, We know that in the first couple months alone, they had 100 million users. That number is inevitably growing. Perhaps a lot of people like myself use this on their phone and think that having the iOS app would be incredibly handy, or maybe they go sign up or they decide that they want to upgrade on the app. So I don't think 5 million users on iOS is unreasonable at all for a company like OpenAI and for a product like ChatGPT.

1:54So$1.2 billion, what does that equate to? Apple's 30 % cut would be about$360 million a year. And that's like renewed every year. And assuming it continues to grow, Apple is going to be making a ton of money off of this one single app. And I think it's interesting because Apple specifically has said that they're working on their own large language models. If you look at Apple's, if you look at their like employment job hiring pages right now, they're plastered with generative AI posts. So this is a really big space and Apple literally could be using OpenAI and ChatGPT to fund a direct competitor similar to what they did with Spotify taking 30 % of Spotify's revenue and then launching Apple Music which has been a massive hit to Spotify and a massive success for Apple.

2:41So I think Tim Cook recently said on their earnings call that the company is going to be weaving AI into all of its products and that he said they'll be deliberate and thoughtful about how they do this. I think it's actually pretty interesting. They don't necessarily need to incorporate AI. I know they're going to, I know this is a focus, but a lot of people are asking like, why are they so slow, right? Google just made a ton of news with their Google IO event where they integrated AI into literally everything. Why is Apple not like so focused on this? Why are they being so thoughtful? I think a big part about it is they know with ChatGPT being an app and a lot of these different AI startups becoming apps on their platform, they're already benefiting from AI more than many know.

3:23In fact, they have a 30 % tax on a massive chunk of the AI market right now. So to say that Apple is not capitalizing, I think is inaccurate. And I think that over the last little bit, Apple has made quite a lot of money from just this section as their iPhone sales have kind of slowed down. And so I think that in the most recent quarter revenue from services, which is a big chunk of that is like subscription revenue from the app store, that was over$20 billion. So I think they're going to continue to take in record profits just off of all of the different AI startups without actually having to do anything, which is just, you know, because of their positioning in the market.

4:07And I think that's important to know. So talking about the AI or talking about the chat GPT app on iPhone and what that means. Number one, a lot of people are like complaining about the privacy issues of it. You know, there's tech radar recently did an article on that. In my opinion, I don't think this is super relevant or super, I guess, new, maybe it's relevant. I don't know. I don't think it's anything new. You know, people are complaining that like, hey, I opened up the chat GPT app on iPhone, and it said, hey, your data might be anonymized and sent to personnel within open AI to review. So essentially, what's happening is when we put responses into chat GPT or when we're talking to it those responses can be looked at by an actual person allegedly well not allegedly they are apparently anonymized so they take out your privacy your personal information um like what your account was and whatnot but if you do put in your own information like hey my name's jayden schaefer and i'm building x y and z company that does x y and z thing and how would you you know make it worth a billion dollars open ai does have people within the company that can look at that.

5:08In fact, Apple recently and Samsung and Chase Bank and a whole bunch of others have, you know, kind of more or less banned their employees from using it because they're worried about the leaks and the information that ChatGPT or their reviewers will be able to pull off of this. So I think it is a relevant issue. I don't know if it's anything special to the Apple iPhone app in particular, but it is something to keep in mind. Another thing I think is really interesting as they're launching this is that in the last few months, there have been a ton of copycat sort of AI chat apps that have popped up, some of them ranking really high on Google Play and also on iOS.

5:48And I think that now that ChatGPT came out, it's first day, right, because it was so new, it was actually struggling to compete or rank against these other income or these other people that had been around longer, which essentially were just using an API to open AI. And then instead of charging 20 bucks a month, like OpenAI charges, they're charging like$28 a month. And so the I think there was a couple different companies specifically that, that were doing this. And they were reached out to for an article on Bloomberg. And essentially, they said, like, you know, hey, are you just like blatantly copying ChatGPT and ripping it off?

6:25And they're like, no, we're incorporating a lot of our own features into these apps. And I think that that is something that is interesting. I don't know how long that is going to be a viable business strategy though, because inevitably like chat GBT has to start incorporating some basic features and functionality into their platform. Um, you know, being able to save your, your prompts or organize your messages or create folders. Like there's a whole bunch of things people have been asking for. Um, and I think that, uh, those eventually are going to get incorporated in, especially when you consider the fact that if you go over to Apple's review page right now, ChatGPT has 6 ,000 ratings.

7:04It has a 4.5 star average review. But some of the things that are driving down the actual, you know, review or the actual score or the rating of this app are features that people would like to see. And so I think when, you know, there's essentially no public consequences, I guess I could say, when they just had it on their own website and people just had to get what you get. I think that was fine. But now once you start releasing it to the public, and especially when there's a lot of competitors who are releasing apps with way more features that are just built off of OpenAI, eventually I think they're going to have to start incorporating better features so they don't have, number one, bad reviews, and number two, so they can actually compete against some of the copycats.

7:47Because if the copycats are doing it better, it just doesn't look good. And honestly, these are not complex or crazy features that people are asking for. They would just make this more simple. I think on one of the reviews I read said, you know, they just want like a search function on there, which I have personally wanted a lot. Other people have asked for more support for iOS shortcuts, saying that would make it a lot more useful. So I think that there's a lot of things they can do right now specifically to make it a better iOS app but also just overall a better app or experience they've kind of shied away from adding too many features I don't know if they're like worried about cannibalizing or killing off too many startups that are doing those kind of like small integrations I kind of doubt it those features but one thing I will say that is kind of cool that iOS now does is that they have support for voice input so essentially you're gonna be able to talk to it now the reason I think this is important is I think this is going to take a big chunk out of Siri a big chunk out of Google's voice assistant and also Amazon Alexa.

8:49If you're able to kind of just pull up your phone and maybe you have a shortcut or maybe you have, you know, the ChatGPT app right there on your home screen, you pull it up, tap it, and then you start talking to it, asking it for advice on something. In my opinion, I actually prefer the, well, I prefer the responses way more out of ChatGPT than out of Siri or Google or Alexa. So I think that this is going to be a no-brainer that may actually kill those uh kill those tools that are so popular um on apple and google and amazon and that being said i think that um of course those tools you know you can say hey siri like ask blah blah blah and give it your question and it's like that's pretty seamless versus having to open your phone and click on an app click on the the microphone button and then start talking but at the same time um just because the response are so much better i think we'll see lot of people doing that.

9:38I would love to see a graph of usage of voice assistants over time as Chad Chippity starts to take over and is added as a app on people's phones. I would love to see like the usage of Siri. I believe it would go down. But it'll be interesting to see how this goes and what the response is because inevitably, we know that Amazon is working on LLM, Apple is now working on an LLM, Microsoft has theirs. And so I think we're seeing a lot of the big players start to are working on these tools. Google obviously has Google Bard, which will inevitably be integrated into, you know, the Google Home Minis and all that kind of on all of those voice assistant tools.

10:17And so I think that this space is going to be highly competitive. There's no way in my mind that Amazon isn't forced to come up with a really strong competitor to this, to ChatGBT, because otherwise Alexa will die. And it's the same with Siri. And obviously we've seen Google has felt quite threatened and so they've come up with their competitors as well so this is going to be a big area there's a lot of big tech companies playing in here and with a lot of competition i believe we'll see a lot of innovation and that is something that i am very interested in following into the future