Google Flexes in AI Arms Race

Plus: The unemployment rate in Jungleland isn't what it seems. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 8, 2023

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TOGETHER WITH

Good morning and happy Friday.

What a bunch of whine-os.

The New York State Liquor Authority is investigating a wine storage company after receiving multiple complaints from clients who believe their precious vinos have been lost, stolen, or misplaced, The New York Post reported. The oenophiles first started to worry when Chelsea Wine Storage quietly moved collections from a facility in Chelsea Market to the basement of a shuttered TGI Friday's near Times Square and the owners failed to return multiple calls and emails. Given how expensive fine wines are, the concern is understandable. But who spends that kind of money to not drink a drink anyway?

Morning Brief

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Google enters the AI race, again.

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The Garden State's job market has split in two.

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Shopping online is only for junk now.

Artificial Intelligence

Google Soars Following Gemini AI Launch

You don't need the first-mover advantage in generative AI when you're a $1.7 trillion company that mints money.

A day after Alphabet released Gemini — the company's first full-bore multimodal artificial intelligence after rushing out the Bard chatbot earlier this year — shares of the company jumped 5.3% on Thursday, adding roughly $80 billion to the company's market cap. It may also vault Google to the top of the AI game.

It's Gemini Season

After ChatGPT took the world by storm earlier this year, Google — sensing that the Microsoft-backed platform represented a sudden threat to its long-held search dominance — launched its own Bard chatbot in February, to somewhat embarrassing results. A demonstration for investors unintentionally showcased a blunder, almost immediately blowing a $120 billion hole in the company's market cap. Employees quickly aired concerns over the allegedly rushed launch, and an army of fact-checking contractors have detailed how difficult it is to correct Bard's oft-bizarre responses. Meanwhile, most informal studies show its capabilities are more often than not inferior to ChatGPT.

Which may be why Google hyped the forthcoming launch of its Gemini system at its I/O Conference in May, heralding it as the result of a yearslong effort by multiple teams — an announcement that sort of tacitly admitted Bard's inconsequence to the company. On Wednesday, Google finally kicked off its Gemini rollout:

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Google says Gemini stands apart because it's truly multimodal, having been trained on images, video, audio, and text, making it well-suited to process information in a variety of ways (A September upgrade allowed ChatGPT to process images, and its DALL-E 2 integration allows it to create images, though parent OpenAI has never stated it's been trained on anything other than text).

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Gemini will be available in three different tiers: Ultra, due for release early next year, which Google says beats competitors in nearly all industry-standard tests; Pro, which now powers Bard and is billed as a competitor to the free version of ChatGPT; and Nano, which runs entirely on the hardware of Google Pixel phones, rather than through expensive cloud computing, marking a relative innovation in the AI space.

Too Fast, Too Furious: Google's approach to the AI arms race may explain some of the ongoing palace intrigue over at OpenAI. According to a Wall Street Journal interview on Thursday with academic and now-resigned OpenAI board member Helen Toner, tension between the board and CEO Sam Altman first arose when Toner warned in a research paper that ChatGPT's launch may have irresponsibly triggered a chain reaction pushing tech giants like Google to prematurely rush their own AI products to market. It all sounds uncomfortably similar to — spoilers! — the existential hand-wringing outbreak at the end of Oppenheimer.

- Brian Boyle

Labor

New Jersey's Labor Mismatch is a Cautionary Tale for Rest of the US

(Photo by Adolfo Félix via Unsplash)

Bruce Springsteen, New Jersey's foot-stomping bard, may have been on to something when he sang, "These jobs are going, boys, and they ain't coming back."

Whether it's white-collar firms cutting staff, restaurants operating on thin margins, or pharmaceutical companies struggling to find skilled employees, New Jersey is a microcosm of the country's post-pandemic labor struggles — no jobs in some sectors, and too many jobs in others, robots hanging over us … are you feeling a Boss song here?

This Gun's for Hire

Two years ago, job seekers barely had to pound the pavement, especially in finance and tech, as firms were looking for any employee they could get their hands on. But perhaps inevitably, cuts were right around the corner.

Hundreds of thousands of employees were let go nationwide this year from the likes of Microsoft, Salesforce, Goldman Sachs, and more. Now, those same big-name firms are sitting back on hiring until their needs for 2024 are fully understood.

New Jersey, the 11th-most populous state with 9.3 million residents, has the nation's fastest-growing unemployment rate. In October, the joblessness rate in the state rose to 4.6%, up from 3.3% a year ago, according to the Labor Department. That's still on the historical low end, but it's several ticks above the national rate of 3.9%:

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While the healthcare sector and social assistance industries have hired 35,300 workers this year, many hospitals still say they are understaffed, and the state is expected to have a shortage of more than 10,000 nurses through 2025, The Wall Street Journal reported.

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Small businesses are holding back on hiring due to changing consumer habits, according to the WSJ. With more employers working remotely, many local restaurants and shops haven't maintained the levels they had when workers were commuting to nearby offices.

Everything that Dies Comes Back: In the early days of covid-19, New Jersey lost more than 700,000 jobs. Not only has it regained those cuts, but it's added 123,000 more jobs than before the pandemic. The hope is that if inflation falls and talk of a recession subsides, which is starting to look promising, the white-collar workforce will rebound, McKinsey's Aaron De Smet, told the WSJ. And if not, at least we can rest easy knowing the money those firms saved from job cuts went toward bonuses for high-ranking executives. A happy ending for all.

- Griffin Kelly

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E-Commerce

Online Luxury Shopping Just Isn't Cool Anymore

Shopping for Fabergé eggs online?

If not, we present you the gift of schadenfreude: The e-commerce luxury market has taken a big dip, The Wall Street Journal reported Thursday. While this isn't necessarily the end of the world for luxury brands themselves, the platforms that sell them are in hot water — especially as discount e-commerce apps sweep the US.

Where Did You Get That Bag?

Growth in luxury goods has hit a rough patch this year. French luxury conglomerate LVMH, which owns Louis Vuitton and Moët & Chandon, reported slowing growth in October. It wrote it off as demand returning to something resembling normal after a few bumper years fueled by pent-up pandemic demand — although it did hat-tip inflation in regard to its ailing premium drinks businesses.

According to the WSJ, a disproportionate amount of the sales slowdown has been online. Two luxury online retailers, Farfetch and MyTheresa, have each suffered roughly 90% drops in their market value since they went public, the WSJ said. This comes as two upstart low-budget e-retailers duke it out for consumers:

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China's newest e-commerce exports, Temu and Shein (Shein is now headquartered in Singapore but was originally founded in China) have been in fierce global competition. Temu filed a US lawsuit against Shein in July, accusing it of unlawfully trying to elbow Temu out of the US market.

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Now, Temu seems to have the upper hand, thanks to the frankly unnerving discounts it can offer shoppers. Its US November sales were triple those of Shein, Bloomberg reported.

Avocad-no Toast: With a year of extremely belligerent macroeconomics almost behind us, it's no wonder shoppers have more of a head for bargains. In the UK, where inflation has been more stubborn than in the US, even high-end shoppers are trading down, as boutique supermarket Waitrose said customers are opting for less adventurous meals. The prime example? Putting smushed peas on toast instead of that all-time millennial favorite (and the reason none of them have a mortgage) avocado.

- Isobel Asher Hamilton

Extra Upside

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Friends of Vladimir: Hollywood stars duped into participating in Russian propaganda scheme, Microsoft says.

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Disney adult: Musk calls for Bob Iger to be "fired immediately" for ruining Walt Disney's legacy.

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