Dumb as a Rock (Premium)

There’s an interesting phenomenon in marketing where it’s impossible to push the benefits of a new version of a product without casting shade on the previous version. After all, if the new thing isn’t much better than the old thing, why would owners of that old thing even consider upgrading?

We see this a lot in Big Tech, with Apple being the most obvious example thanks to its hyperbolic claims for even the most modest of upgrades. But it’s not just Apple. As technology evolves, we collectively move from one thing to the next, and it’s only when the past is firmly in the rearview mirror that it becomes obvious how silly we were to be fixated on a product or service that now seems quite quaint.

Today, AI is suddenly all the rage. Companies are tripping over each other, both to establish their superiority over competitors with new products, and to market AI incessantly in new feature updates to existing products. This kind of thing, too, is not new: throughout the history of personal technology, there were certain products or brands that briefly had the golden touch, with investors and speculators jumping all of the companies that marketed these things. Linux had that moment. Social media. And many others, of course. But now it’s all about AI.

Microsoft, a pioneer in exaggerating its use of AI, has been playing this game for years. At Microsoft, everything is AI, and you don’t have to have a keen insight into the internal workings of the company to know that this term is now tied to career advancement and project approval. The most skilled and ambitious employees and executives are moving, as always, from uninteresting legacy products and services to the new hotness. The rest are adding AI—or at least AI marketing—to those legacy products to keep them on the radar. If you want to get ahead at Microsoft today, you better be talking AI.

This, of course, is why decades-old functionality like spelling and grammar checking is suddenly described as AI, and it’s why Microsoft marketed the addition of Bing logos to the Windows 11 Taskbar and Search highlights pane as integration with “the new AI-powered Bing.” But there’s no integration: you type a query, Microsoft forces you to use Microsoft Edge even if you chose a different product, and you find yourself in a web browser; there is no Bing AI in Windows 11 (or in Microsoft Edge, for that matter). It’s just marketing.

It’s fascinating to me that AI has arrived at this exact moment in history.

I’ve often wondered aloud why Microsoft, a conservative, slow-moving company under Satya Nadella, would so suddenly unleash the AI wars when this technology was widely known internally to be unreliable and even dangerous. One theory that’s emerged—that I don’t entirely agree with—is that Nadella, who previously worked on Bing, has long wanted to make up for that product’s embarrassing performance against the search market leader, Google, and that recent improvements to what we now call Bing AI excited him enough to push forward. (That Google, which has similarly powerful AI capabilities, confronted the same decision and responsibly held off for all the right reasons, is equally fascinating.)

A second related theory is that Microsoft saw the 100 million new users that ChatGPT obtained in just months, compared that to Bing usage over a wide period of time, and calculated that even a 1 or 2 percent gain in Bing usage share would be worth billions of dollars to the company, a revenue growth that desperately needed in these trying economic times. This seems a bit more plausible to me, but perhaps some combination of the two theories—or some other factors we just don’t know about yet—was the impetus. We don’t know yet.

What we do know is that Microsoft and the broader personal technology market have been busy looking for what we call “the next wave,” the next major platform innovation that will unseat the current dominant platform, mobile, just as decisively as mobile previously defeated the PC. Many candidates have emerged over the years, and each has failed. The Internet of Things (IoT) is an obvious example, because it has the same numerical superiority over mobile as mobile does over PCs. Virtual reality (and related technologies like Augmented Reality, which companies like Apple and Meta are still toiling away at. And, of course, voice assistants, which were once seen as the poster child for so-called natural user interfaces.

These three efforts have some interesting similarities. As noted, each has failed, to date, to unseat mobile as the center of personal computing. Each has some number of users, of course some market size, and each has continued forward. And, most interesting to me, Microsoft was an early proponent of all three, only to make almost zero inroads in any of them. Its failures stand out like open wounds.

So, yes, it is possible that Microsoft sees AI as the way back to the mindshare and influence it had when Windows was king. The software giant will never dominate any market the way it did in the 1990s and early 2000s, the world is too heterogeneous for that now. But Microsoft today is not even part of the conversation, even though it’s the second-biggest tech company in the world. The Street’s Bob Lang once coined the term FANG—for Facebook, Amazon, Netflix, and Google—because their stock was so valuable at the time. But leaving out Microsoft (and Apple) from that group was a ridiculous mistake. One that no doubt rankled Microsoft more than Apple, given its Oldsmobile-like public image.

Worse, with AI, Microsoft can now claim that its previous efforts in both search (Bing) and personal digital assistants (with Cortana) were the silly, immature byproducts of simpler ages. And that AI is the next big thing, the reason why you will now consider Microsoft again after most had ignored it for decades. I get it. But we need to view this shift with open eyes. And remember the past.

Steve Ballmer infamously claimed that the iPhone was overpriced when it first shipped, and he’s widely mocked for that observation by Apple fans to this day. But Ballmer was right: the iPhone was too expensive and it sold so poorly as a result that Apple actually cut the price of the device by 33 percent just two months after it launched. It was only then that sales picked up. The problem here isn’t that people don’t understand history, the problem is that Ballmer himself later felt the need to step back from his initial complaint. Come on, dude.

Speaking of Mr. Ballmer, he likewise discussed his biggest mistake after he stepped down as Microsoft’s CEO, claiming that he was too slow to turn Microsoft into a hardware maker. That is a crazy take on history, given how successful Windows was on his watch. And does anyone really believe that creating a Surface division when the PC was the center of personal computing was in any way feasible? That Windows Phone would have ever happened without the iPhone first coming to market? It’s just an unfair way to view the past. (The fact that Ballmer, and not Nadella, is the person responsible for Microsoft’s cloud computing path should not be overlooked either.)

But now Satya Nadella is running Microsoft, and with his company pimping AI in ways that I find irresponsible, he’s now engaging in some history rewriting of his own. And some marketing, where previous offerings are now sad compared to the new thing.

“They were all dumb as a rock,” Nadella told the Financial Times, referring to personal digital assistants. “Whether it’s Cortana or Alexa or Google Assistant or Siri, all these just don’t work. We had a product that was supposed to be the new front-end to a lot of [information] that didn’t work.”

Uh-huh.

Granted, Nadella can crap on Cortana in ways that the CEOs of Amazon, Apple, and Google cannot with their own offerings: Cortana is dead as a brand, killed off by a combination of Microsoft’s ineptness and a lack of access: thanks to the failure of Windows Phone, the firm simply didn’t have a reasonable way to spread Cortana to the masses. It suffered from the same problem that dogged Bing, a too-small user base that didn’t provide the virtuous cycle of feedback that its competitors still benefit from. And yes, those competing services have underperformed, too. But Alexa, Google Assistant, and Siri are used by millions every day. Cortana never was.

So, yes, you can believe that the company that couldn’t make Cortana or Bing work has suddenly found the secret sauce to success. That its non-exclusive access to OpenAI offerings like ChatGPT and related technologies somehow gives it an edge. Or, you can use history and common sense as your guide, whether it comes to Microsoft’s performance or marketing in general, and conclude that we stand here now in a moment in time where anything can happen, and we have no idea how it’s going to end.

But I have my theories.

And one of them involves the fact that AI is not the next wave but is rather an ingredient, a component, of advances that will come across multiple products, services, and platforms. It will make mobile, PC, the web, IoT, VR, and whatever else better but it is not its own thing.

And in that sense, AI has already failed. It’s not the next wave. It’s a flavor enhancer, the MSG of technology, something with obvious benefits but also obvious issues.

And while the future is both exciting and terrifying, I can’t wait to see what comes next. Perhaps a day will come when some future tech leader—maybe even Mr. Nadella–describes AI as “dumb as a rock” while marketing what comes next.