Today Google search works by building a huge index of the web, and when you search for something, those index entries gets scanned and ranked and categorized, with the most relevant entries showing up in your search results. Google's results page actually tells you how long all of this takes when you search for something, and it's usually less than a second. A ChatGPT-style search engine would involve firing up a huge neural network modeled on the human brain every time you run a search, generating a bunch of text and probably also querying that big search index for factual information. The back-and-forth nature of ChatGPT also means you'll probably be interacting with it for a lot longer than a fraction of a second.
All that extra processing is going to cost a lot more money. After speaking to Alphabet Chairman John Hennessy (Alphabet is Google's parent company) and several analysts, Reuters writes that "an exchange with AI known as a large language model likely costs 10 times more than a standard keyword search" and that it could represent "several billion dollars of extra costs."*** The cost of search is definitely more of a problem for Google than Microsoft. Part of the reason Microsoft is so eager to rock the search engine boat is that most market share estimates put Bing at only about 3 percent of the worldwide search market, while Google is around 93 percent. Search is a primary business for Google in a way that Microsoft doesn't have to worry about, and with it needing to process 8.5 billion searches every day, Google's per-search costs can pile up very quickly.
Thursday, February 23, 2023
AI Chat Search 10 Times As Expensive As Standard Google, Microsoft Search
From Ars Technica, "ChatGPT-style search represents a 10x cost increase for Google, Microsoft: Google hints that an AI chatbot search engine will really cut into its profits." by Ron Amadeo:
Wednesday, February 15, 2023
Friday, February 10, 2023
Comparing Florida And New York Numbers
From The Wall Street Journal, Opinion | Review & Outlook, "New York vs. Florida, by the Numbers: Some numbers tell a story about comparative governance." By The Editorial Board:
Comparative governance is a useful course of study, not least because bad governance is so costly to people and prosperity. We often write about the migration from the Northeast to Florida and other states, but sometimes the contrast is best illuminated with some data. Take a look at the nearby chart comparing some key indicators of governance in a pair of states that not long ago were about the same size—New York and Florida. As recently as 2013 the two states had similar populations, but so many people have moved to the Sunshine State that it’s now roughly 2.6 million people larger.
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| Source: The Wall Street Journal |
Monday, February 6, 2023
Inequality Measurement Limitation Comment About Comparing Income Growth Of The Top Income Group To The Lowest Income Group: Reprint Of My Almost 11 Years Ago Post
Below is a reprint of my almost 11 year old post from May 7, 2012, about the limitation of comparing the income growth rate of the upper income earners to the lower income earners as a measure of increasing inequality.
Monday, May 7, 2012
In Good Economic Times, Income Growth Of The Upper Income Group Looks Like It Grows Faster Than The Lower Income Group Because There Is No Uppermost Boundary
After the uppermost ten (or one or twenty) percent income group experiences an increase in income, the group remains in the top percent ranking. There is no upper boundary point for those in the top grouping that allows them to move up beyond the group. The top is the top.
In a lower income bracket, an individual wage earner can move up and out of the group's income range. When all or some of those in the bottom ten percent group experience an increase in income, some or all of those individuals do not stay in the bottom ten percent group. They move up, beyond the upper boundary of the low income bracket, into higher income groupings and the lowest income group is replenished keeping the income growth rate of the lowest group low.
In the lowest income group, along with full time wage earners with low annual salaries, there are part-time workers, inexperienced workers and workers who work less than a full year, such as retirees, new graduates, rehired unemployed and other new workforce entrants, who will report less than a full year's earnings and some of whom will earn beginners' salaries. Inequality statistics do not adjust part-time or less than full year wages to full time equivalent, annualized earnings when making inequality comparisons, nor are the statistics adjusted for work experience.
There is a constant workforce replenishment stream of part-time, less than annual wage earners and inexperienced new entrants. Many workers in this replenishment stream are most likely in the lower income groupings. Their lower earnings will replace the rising earnings of the individuals in the lower income groups that move into higher income groups. Their lower earnings will keep the earning's growth rate and the average earnings of the lowest income group low.
When an economy is growing and hiring new entrants as it did for the last 30 to 40 years until the recent recession, companies' hires will include new graduates, inexperienced workers and mid-year new workers. For many, when partial year workers' salaries are full year and when inexperienced workers and new graduates gain experience and job promotions, their incomes will rise and be counted as part of a higher income grouping.
A growing economy over years will capture higher and higher upper income wage earners in its uppermost bracket, while replenishing its lower income brackets with part-time, less than annual salary, inexperienced workers who will keep the average wage and earnings growth of the lower groups low.
A natural effect of a growing economy with new entrants into the workforce is an increase in the inequality measures between the uppermost and lowest income groups. When an economy slows and there are fewer new hires and fewer promotions, there will be less growth in wage inequality.
In a lower income bracket, an individual wage earner can move up and out of the group's income range. When all or some of those in the bottom ten percent group experience an increase in income, some or all of those individuals do not stay in the bottom ten percent group. They move up, beyond the upper boundary of the low income bracket, into higher income groupings and the lowest income group is replenished keeping the income growth rate of the lowest group low.
In the lowest income group, along with full time wage earners with low annual salaries, there are part-time workers, inexperienced workers and workers who work less than a full year, such as retirees, new graduates, rehired unemployed and other new workforce entrants, who will report less than a full year's earnings and some of whom will earn beginners' salaries. Inequality statistics do not adjust part-time or less than full year wages to full time equivalent, annualized earnings when making inequality comparisons, nor are the statistics adjusted for work experience.
There is a constant workforce replenishment stream of part-time, less than annual wage earners and inexperienced new entrants. Many workers in this replenishment stream are most likely in the lower income groupings. Their lower earnings will replace the rising earnings of the individuals in the lower income groups that move into higher income groups. Their lower earnings will keep the earning's growth rate and the average earnings of the lowest income group low.
When an economy is growing and hiring new entrants as it did for the last 30 to 40 years until the recent recession, companies' hires will include new graduates, inexperienced workers and mid-year new workers. For many, when partial year workers' salaries are full year and when inexperienced workers and new graduates gain experience and job promotions, their incomes will rise and be counted as part of a higher income grouping.
A growing economy over years will capture higher and higher upper income wage earners in its uppermost bracket, while replenishing its lower income brackets with part-time, less than annual salary, inexperienced workers who will keep the average wage and earnings growth of the lower groups low.
A natural effect of a growing economy with new entrants into the workforce is an increase in the inequality measures between the uppermost and lowest income groups. When an economy slows and there are fewer new hires and fewer promotions, there will be less growth in wage inequality.
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