Technology Microsoft wants to win the AI ​​app race with...

Microsoft wants to win the AI ​​app race with three major advantages


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Microsoft is racing to expand its AI-powered app ecosystem: At Build Yesterday, the company announced it extends its Copilot applications and uses the same standard for plugins (that communicate with APIs of other software and services) that its partner OpenAI introduced for ChatGPT. This allows developers to build plugins that work in ChatGPT, Bing Chat, Dynamics 365 Copilot, Microsoft 365 Copilot, and the new Windows Copilot.

But this isn’t an easy win for Microsoft, experts say. Finally google announced at I/O that Bard will soon be compatible with additional apps and services from both Google – including Docs, Drive, Gmail and Maps – and third-party partners such as Adobe Firefly.

“Because we’re talking about APIs and not hardware-dependent applications or apps, it’s much harder to defend a position of hegemony,” Whit Andrews, vice president and renowned analyst at Gartner Research, told VentureBeat. If someone else builds APIs that are just as good, “there’s not such a big switching cost,” he said.

Microsoft has an edge

Andrews stressed that Microsoft certainly has an edge and three main advantages.


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First, Microsoft has an “extraordinary” first-mover advantage as an OpenAI partner. “So the more they can establish exposure and attraction, the more they can generate defensible value,” he said.

In addition, brand power without a moat will also be an important driver, he explained. “With the tremendous value of the Microsoft brand, things have to move so fast for Microsoft to achieve the best possible result.”

Finally, with its great community of developers, Microsoft has the opportunity to gain market share and exposure. “Microsoft attracts developers better than anyone else,” says Andrews. “So if you’re Microsoft, lean into that this week [at Build]. Can you offer your developers, your believers, the opportunity to participate in this extraordinary AI world that they will find attractive and familiar?” Microsoft in the developer mind should be synonymous with access to easy AI-powered functionality, he added: “That means growth has to be explosive – every developer in the Microsoft family has to say to themselves, ‘I’ll start looking over there.'”

“An impressive, all-out attack” has limits

According to Matt Turck, a VC at FirstMark, Microsoft’s AI app ecosystem and plugin framework is an “impressive, all-out assault by Microsoft to be top-of-mind for developers around the world who want to build with AI.”

Microsoft is certainly doing its best to lead the space and get ROI on its multibillion dollar investment in OpenAI, Turck told VentureBeat. But he said it “remains to be seen if the world is ready to live in a Microsoft-dominated AI world” and suspects there will be “stiff resistance”, especially on the corporate side – where many want to take advantage of open source and multi-agents for customization, and also want to avoid having their data go to a cloud provider (Azure in this case).

Andrews agreed that it’s too soon to know if Microsoft will prevail – or if the AI ​​app and plug-in ecosystem will even flourish. “For many consumer users, ChatGPT is pretty amazing for what it does right now, and there can be issues with plugins conflicting, things can get a bit challenging. The value of a plugin requires education, explanation and use.”

More difficult to implement effective controls and safeguards

Other experts point out that the growth of the app ecosystem will make it even more difficult to develop effective controls and safeguards at a time when AI regulation is becoming a top priority.

“The main concern in my mind is a division of responsibility between the third parties and the entity providing the source LLM,” Suresh Venkatasubramanian, a computer science professor at Brown University and former White House policy adviser, told VentureBeat in a message.

While he said there is also an opportunity if the companies proving LLM service are willing and able to introduce more controls, “I don’t see that happening any time soon. To me, this continues to reinforce the importance of guardrails ‘at the point of impact’ where people are affected.

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