5 ms·

A friend of mine was an early investor in DeepMind. For like a year and a half, because that's how long it took Google to buy them out for somewhere around $400

A friend of mine was an early investor in DeepMind. For like a year and a half, because that's how long it took Google to buy them out for somewhere around $400mm. At the time, I thought that sounded like an amazing exit (OK, it still sounds like an amazing exit), and wasn't clear how Google could get that value out in a reasonable timeframe. I was so, so, wrong. The amount of value hidden and public in that acquisition is astounding. Whoever put it together deserves a massive bonus, ideally in Alphabet stock. MS putting $1bn a year in on AI is a catch-up game. They may do very well at it, but make no mistake -- we are only seeing the public side of the value Google is generating. I don't imagine we'll ever see blogposts about how they're tuning adwords using AI, for instance. But you can bet the same sort of gains they are seeing with translations, audio generation, game playing they are seeing in the ad space.

douche 10y ago
How would we know if they are doing amazing things with AdWords, if we're all running uBlock/AdBlock/etc?
- alexbeloi 10y ago
  There was an internet marketing manager on a podcast I listened to once that said the number of people using adblockers on the internet is essentially negligible, it's in the millions but a small percentage of all users (<5% if I recall). edit: the Podcast was Talking Machines (about machine learning) http://www.thetalkingmachines.com/ http://www.thetalkingmachines.com/
  - douche 10y ago
    This[1] is from a year ago, before ad-blocking became widely available on mobile, and they're still looking at hundreds of millions of users using adblockers. I don't know how reputable PageFair is, but they estimate more than 20% of smartphone users are adblocking now[2]. [1] http://bits.blogs.nytimes.com/2015/08/10/study-of-ad-blocking-software-suggests-wide-use/?_r=0 http://bits.blogs.nytimes.com/2015/08/10/study-of-ad-blockin... [2] https://pagefair.com/blog/2016/mobile-adblocking-report/ https://pagefair.com/blog/2016/mobile-adblocking-report/
    - yathern 10y ago
      That sounds like a very high number. At least anecdotally, I'm not aware of anyone in my circle of influence who uses a mobile ad blocker. My suspicion would be that less people use mobile ad blockers than on a browser.
  - rhino369 10y ago
    I always wondered what would happen if say MS and Apple decided to just block ads by default on systems with their OSs.
    - snnn 10y ago
      IE has a built-in ad blocker for years.
gtjrossi 10y ago
Remember that this is, in large part, a restructuring of existing orgs and investments. I wouldn't interpret this as the starting gun for AI/deep-learning investments at Microsoft. There's been heavy R&D investment for years in this space making its way into products like Cortana, Bing, PowerBI, Skype, Cognitive Services, etc. Similarly, there's a non-public side to the results at Microsoft I'm sure. So I don't think catchup is a fair analysis.
jomamaxx 10y ago
" and wasn't clear how Google could get that value out in a reasonable timeframe." Tell us, how the valuation can be justified in terms of dollars. Which 'AI' products are useful in the portfolio today, that makes products useful to you and I, that are derived from DeepMind? The fact is - 'AI' is really short-hand for Multi-layer Neural nets - and they are applying those things in some very specific areas such as voice recognition and image recognition. I think there will be many more places where we can do this - but I think it's going to be a very long time before we get to 'true AI'.
- AJ007 10y ago
  https://deepmind.com/blog/deepmind-ai-reduces-google-data-centre-cooling-bill-40/ https://deepmind.com/blog/deepmind-ai-reduces-google-data-ce...
  - jomamaxx 10y ago
    Admittedly, that's pretty 'cool' (pun intended) but not $400M kill. I think we still have a long way to go to see AI reap direct rewards for consumers. Payoffs have been minimal/incremental for now.
    - jsmthrowaway 10y ago
      Do you have any idea how much it costs to cool a datacenter?
      - jomamaxx 10y ago
        Not $400 Million dollars.
- danblick 10y ago
  I'm not sure if that is the right metric for research groups. If someone said "the startup has a promising cure for cancer in trials" would you ask if it had produced revenue yet?
taurath 10y ago
Here's what I imagine - Google will move from a PUSH model where advertisers specify demographics to sell to, to a model where Google tells the advertisers or product owners that they have 200,000 people they could target their ad to and get a 50% sell-through rate guaranteed, which they then take a much higher cut. Or frankly they probably already do this, and are just increasing that sell-through rate via AI.
elsewhen 10y ago
here is a blog post about how they are using ai in adwords: https://adwords.googleblog.com/2016/07/more-powerful-bid-automation-with-smart-bidding.html https://adwords.googleblog.com/2016/07/more-powerful-bid-aut...

douche 10y ago

How would we know if they are doing amazing things with AdWords, if we're all running uBlock/AdBlock/etc?

alexbeloi 10y ago
There was an internet marketing manager on a podcast I listened to once that said the number of people using adblockers on the internet is essentially negligible, it's in the millions but a small percentage of all users (<5% if I recall). edit: the Podcast was Talking Machines (about machine learning) http://www.thetalkingmachines.com/ http://www.thetalkingmachines.com/
- douche 10y ago
  This[1] is from a year ago, before ad-blocking became widely available on mobile, and they're still looking at hundreds of millions of users using adblockers. I don't know how reputable PageFair is, but they estimate more than 20% of smartphone users are adblocking now[2]. [1] http://bits.blogs.nytimes.com/2015/08/10/study-of-ad-blocking-software-suggests-wide-use/?_r=0 http://bits.blogs.nytimes.com/2015/08/10/study-of-ad-blockin... [2] https://pagefair.com/blog/2016/mobile-adblocking-report/ https://pagefair.com/blog/2016/mobile-adblocking-report/
  - yathern 10y ago
    That sounds like a very high number. At least anecdotally, I'm not aware of anyone in my circle of influence who uses a mobile ad blocker. My suspicion would be that less people use mobile ad blockers than on a browser.
- rhino369 10y ago
  I always wondered what would happen if say MS and Apple decided to just block ads by default on systems with their OSs.
  - snnn 10y ago
    IE has a built-in ad blocker for years.

gtjrossi 10y ago

Remember that this is, in large part, a restructuring of existing orgs and investments. I wouldn't interpret this as the starting gun for AI/deep-learning investments at Microsoft. There's been heavy R&D investment for years in this space making its way into products like Cortana, Bing, PowerBI, Skype, Cognitive Services, etc. Similarly, there's a non-public side to the results at Microsoft I'm sure. So I don't think catchup is a fair analysis.

jomamaxx 10y ago

" and wasn't clear how Google could get that value out in a reasonable timeframe." Tell us, how the valuation can be justified in terms of dollars. Which 'AI' products are useful in the portfolio today, that makes products useful to you and I, that are derived from DeepMind? The fact is - 'AI' is really short-hand for Multi-layer Neural nets - and they are applying those things in some very specific areas such as voice recognition and image recognition. I think there will be many more places where we can do this - but I think it's going to be a very long time before we get to 'true AI'.

AJ007 10y ago
https://deepmind.com/blog/deepmind-ai-reduces-google-data-centre-cooling-bill-40/ https://deepmind.com/blog/deepmind-ai-reduces-google-data-ce...
- jomamaxx 10y ago
  Admittedly, that's pretty 'cool' (pun intended) but not $400M kill. I think we still have a long way to go to see AI reap direct rewards for consumers. Payoffs have been minimal/incremental for now.
  - jsmthrowaway 10y ago
    Do you have any idea how much it costs to cool a datacenter?
    - jomamaxx 10y ago
      Not $400 Million dollars.
danblick 10y ago
I'm not sure if that is the right metric for research groups. If someone said "the startup has a promising cure for cancer in trials" would you ask if it had produced revenue yet?

taurath 10y ago

Here's what I imagine - Google will move from a PUSH model where advertisers specify demographics to sell to, to a model where Google tells the advertisers or product owners that they have 200,000 people they could target their ad to and get a 50% sell-through rate guaranteed, which they then take a much higher cut. Or frankly they probably already do this, and are just increasing that sell-through rate via AI.

elsewhen 10y ago

here is a blog post about how they are using ai in adwords: https://adwords.googleblog.com/2016/07/more-powerful-bid-automation-with-smart-bidding.html https://adwords.googleblog.com/2016/07/more-powerful-bid-aut...