The Demise of Neeva: Exploring the Fallout of the AI Search Engine Shutdown

0:00we may be seeing the first victim to and the first shoot it dropped since GoogleBard was announced. this the AI search competitor Neva has officially announced that is going to be shutting down its consumer search product in the coming weeks this is really interesting so obviously Neva has actually been around a lot of people just have found out about it since Chad Chibutin kind of hype around AI started but Neva has actually been around since 2019 it was started by a former Google executive who essentially said that he was just disillusioned with everything happening at Google he felt like Google was pursuing growth of users at all costs and so he decided he would like to create a better privacy focused search engine and he created Neva comm which was an AI search engine and you could you know similar to what Google Bart is doing now you could search and get AI results on Neva.

0:59So they have announced that they're shutting it down. You know, one can only assume that after Google Bard came out, there wasn't really much hope for them to think that they could win in the search engine space, a privacy focused search engine. Obviously, that is super difficult. You know, we have other ones, there's, I believe, DuckDuckGo, and a couple other competitors, I think Brave has its own search engine as well. And so I think there's been another like a handful of other like privacy focused competitors essentially they're like the anti-google or the anti-facebook who uh take all of your information and sell it or use it to target you with ads so we have these other people um neva you know was really prominent because it was specifically ai so it's kind of doing what like microsoft bing and google bard are doing but as soon as these like honestly as soon as google bard rolls out and it's going to be used by billions of people it's included in google search results honestly neva kind of dies uh because it's just so much more powerful they have so many more resources that being said of course uh the privacy aspect of it i'm sure was great um because google still is not doing that obviously but i believe that there's probably other um competitors that probably were just beating them so they essentially they released uh they released a blog post and the reason that they said they're shutting down is because they said that acquiring users has been really hard.

2:25And they also said that different economic environments have made it clear that a business in consumer search is not sustainable. That's just what they're saying. They said, this is a really tough decision that took into account lots of things, our business progress so far, the current funding environment, and our ability to continue to grow quickly in this vastly changing search environment. He tweeted that out on Saturday. So I think it's interesting. You know, I've been in software before, like customer acquisition can be really hard unless you have like incredible product market fit, I would have been really curious to see their numbers over the last couple months and their adoption because I heard Neva shilled by some really prominent and, you know, big podcasters.

3:09Jason Calacohannas from This Week in Startups and the All-In Podcast talked relentlessly about Neva to the point that his co-hosts would like complain that it was like always a sponsored thing but like you gotta think that a lot of these people using ai um have heard of it or seen it and i would be really curious to see what their user numbers were but i i also know that uh you when it comes to search there is a cost associated with every single search and when you have a free search engine um and p and like all of your users are essentially free unless you can learn to monetize really quickly which when your privacy search engine is a lot harder um i imagine that that would have been difficult and that probably is where they ran into a snag so I think this is going to be interesting to see what comes next in the landscape if we see more prominent AI companies like this drop and that that being said Neva is not shutting down essentially they said that they're going to explore other consumer applications of their AI technology other applications of their AI technology beyond just search.

4:12I think it's honestly, it's kind of sad, I'm sure, because it's been around since 2019. And it's probably their dream and they hustled for and whatnot. But they probably missed the boat by not raising more funding in 2001 when things were frothy. You know, they had two years to do it. Because 2022 and 2023 have been rough on raising funds for any sort of software company. That being said, AI did seem to have a bit of a boom. I would assume Neva would have gotten a spike in numbers. I'm surprised they weren't able to grab some quick money because they'd been around a while in the space. That being said, though, I know the number one question people would have brought up because in my current software company and AI, which isn't anything related to search, it's also still the number one question people bring up, but people are obviously gonna say, what happens when Google does the exact same thing?

5:05And I think Neva really probably struggled to answer that question to investors to differentiate themselves and to actually show that they had a moat, right? A leaked memo from Google said, we don't have a moat and neither does OpenAI. And I think for someone like Google and OpenAI, not having a moat is fine because, well, it's not fine. It's not great. But like, they can go ahead because they're obviously the biggest, they can spend millions or billions of dollars developing this technology. And that money spent is, you know, essentially their moat, although things get cheaper. So it becomes less and less of a moat.

5:34But the users they have, the money they spent, first mover advantage, those are things that Google and OpenAI really want to focus on. And a company like Neva just really can't keep up with what they were doing. So I think it's going to be interesting to see what they continue. They said they're going to explore use cases for generative AI and large language models in search going forward. And they said that all of the customers that currently have paid for it are going to get a refund. this is really interesting like they're not even just leaving up like some sort of basic version of the technology for their paid users to just continue to use and continue to make money they're literally just refunding the unused portion of any of their premium users and they're deleting all user data as part of the shutdown now my one caveat or like one side note which is just purely speculative but the one thing this reminds me of with the whole um deleting all of the data stuff is potentially, I highly doubt this happened, but potentially if there's some sort of data breach and they felt like it was, they're not able to redeem themselves, this is, you know, an interesting path they might also take.

6:47It just reminds me of Google+. Essentially, Google had their Facebook competitor, Google+. It got a lot, it didn't get a lot of traction, honestly, kind of made them look bad because Facebook kept just like kicking their butt in that department. And eventually there was a big data breach, it got hacked. And so then Google just like pulled the plug and said, shutting it down, deleting all the data, deleting the whole thing, they didn't even like just kind of leave it up as like one of their half baked products is just kind of chilling like they have done other times Google, to be honest, it's pretty good at pulling the plug.

7:15And I think the reason on like unsuccessful products, and I think the reason, especially for Google plus is as soon as they had that data breach, they just wanted to like completely get rid of that because of essentially was a liability. So I doubt this is the case with Neva, but it is interesting that they're just deleting all of the data and refunding everybody and not even like, you know, trying to continue to make money from that. So I think the, uh, the executives over at Neva said they'll have more to share in the coming weeks. So we will look forward to seeing that. But I do think this is really interesting story because this is the first shoe to drop.

7:47This is the first AI company to bite the dust. Now it just like startup, because there's a hundred startups right now that are building, like, honestly, a lot of them are building like what you consider features they're like oh we do this cool thing and the question is is that a feature or is that a fully fledged product neva was a fully fledged product so that's why i think that it's actually interesting to talk about whereas a lot of these other ai companies when they say like hey chat gpt just unleashed plugins now our whole company is dead or like google just released like x y and z like in or like you know google released like a feature that auto writes emails in gmail now my whole company is dead it's like yeah the problem is a a lot of these companies were just like features, they weren't fully fledged products or platforms, or they're just like a little feature or a little gimmick, essentially, like a faster way to integrate ChatGPT into something.

8:37And I think you don't have a moat in that case. And a lot of companies are going to really struggle if that's all they have to stand on. And so those companies definitely are going to struggle. But something like Neva, which is a search engine, which, you know, arguably has a moat takes a lot of like manpower and a lot of resources to get something like that going. Seeing a company like that shut down their search operations, I think is very telling in the space. I wonder, as we see Apple's making announcements that they're getting into AI, Amazon's making announcements that they're getting into AI.

9:08And as we kind of see this consolidation of Microsoft, Google, Apple, and Amazon, what other companies, prominent AI companies we will see die because they become irrelevant, or they can't keep up, or they just weren't big enough to compete with these you know the big players in the space so that is an area that we will continue to follow into the future