The AI ​​Beat: Big Tech cloud AI wars flare up

Welcome to the AI ​​Beat – my new column that takes the week’s news on artificial intelligence (AI) and tries to put it into context.

When I yesterday asked Gartner analyst Sid Nag why this week’s AI-related cloud news, released on Google Cloud Next and Microsoft Ignite, seemed like a “tsunami” of product announcements, he chuckled.

Although neither of us had our cameras on for the interview, I felt Nag, who focuses on cloud services and technologies, nod wisely. “I think I know why that is,” he said.

I definitely needed some expert guidance. After all, I’ve been on the AI ​​beat at VentureBeat for six months, but I’ve yet to fully adjust to Big Tech’s seasonal PR routines — in fact, this week’s barrage was the kind that always got me here. on reminds strip off the oatmeal.

There were announcements on Google Cloud Next, ranging from the new Vertex AI Vision service, a computer vision-as-a-service capability, to a new AI Agents service and the open-source OpenXLA project. Additional incremental AI improvements were also announced on Next, including support for the Nvidia Merlin recommendation system framework, AlphaFold batch derivation, and TabNet support.

Next came a boatload of Azure AI news from Microsoft Ignite focused on productivity, including pre-built AI models available in Form Recognizer, expanded summaries and language support in Azure Cognitive Services, new features in speech-to-text and text-to-speech, and the debut of DALL-E 2 as part of Azure’s OpenAI Service, by invitation only.

Using AI to make the cloud an intelligent platform

The Big Tech cloud providers, Nag explained — Google, Microsoft and AWS are the top three, IBM and Oracle round out the top five — are beyond the era of standardized infrastructure capabilities, such as compute storage and networking, with a new goal of enabling the entirety of the cloud. infrastructure becomes more intelligent and predictable. The new trend, he said, is applying AI to those infrastructure needs.

“I think the use of AI by pedestrians has become more pervasive, which is something I’ve been pushing with the hyperscalers for the past three or four years,” he said.

Big Tech, he explained, wants to effectively use AI up and down the cloud stack to make the cloud an intelligent platform, as well as apply a layer that democratizes AI and brings it to the business user.

Lots of ingredients, but no clear recipe

However, the problem with so many cloud announcements about AI-related capabilities is that Big Tech isn’t communicating well how to combine these capabilities intelligently, Nag noted.

“If I want to cook chicken parm,” he explained, “what ingredients do I need and what proportion of those ingredients? What is the recipe I should use? I think there are a lot of things being announced by cloud providers, but they should really improve the game on how to intelligently use those things to get results.”

Fear of falling behind in a multicloud era

The Big Tech AI announcements coming so close together — Oracle will be on deck in Cloud World next week, teasing AI news with Nvidia — is no coincidence, Nag said.

“No one wants to fall behind,” he said. “Historically, Google has been at the forefront of the AI ​​business; it’s almost as if Microsoft and others are feeling the heat.”

In an era of multicloud – where an organization uses a combination of clouds to distribute different applications and services – the battle for customers to use advanced AI systems is fiercer than ever.

“[Multicloud] is the biggest use case we see today,” Nag said. Back in the day, workloads and applications moving to the cloud were the low-hanging fruit of things like email applications, Office 365, CRM or ERP. However, now organizations are moving heavy, complex applications to the cloud.

“They’re moving the most important crown jewels,” he explained. “For example, if I’m a hedge fund in midtown Manhattan and I’ve written a specialized application to do algorithmic trading, I depend on that to strengthen my competition because executing trades in nanoseconds is important.”

A cloud AI war for the best in class

When that starts to happen, CIOs and IT leaders will look for best-in-class components to service that workload — so in addition to a primary cloud provider, an organization can turn to a secondary or tertiary provider.

“It’s not that the primary supplier doesn’t have the other components, but they may or may not be best-in-class,” he said, adding that once the secondary supplier gets a foot in the door of the company, it may appear to expand his business. Services.

With companies worldwide expected to spend an estimated $494.7 billion on cloud computing this year, according to Gartner, a 20% increase from 2021 and spending expected to reach $600 billion by the end of 2023, there is a lot of potential money at stake. And Nag told the Wall Street Journal [subscription required] in April that it is “CIOs’ willingness to buy higher-value features that fuel public cloud spending growth.”

Rohit Kulkarni, an analyst at MKM, has covered this topic in a research note last week [subscription required]. He said he is “confident that we are about to accelerate the Big Tech AI wars”, although it is unclear who has the edge when it comes to commercial success.

But he said he’s certain about one thing: “Commercial rollout of AI apps requires significant storage and compute resources, so public cloud providers could benefit from a strong tailwind on usage in the coming years.”

Hmm…I wonder why I’m suddenly craving chicken parm?