What is privacy worth?
How bad is it that OpenAI sees your prompts?
Today is Victoria Day for Canadians. It’s like Memorial Day, only it comes earlier (I don’t think it’s because spring comes earlier up there). Maybe they should consider pushing it back a week so it aligned with the US holiday, and (on average) a slightly warmer weekend.
On Thursday premium subscribers received a post about Mormonism and what it tells us about regression to the mean. To read it subscribe here.
Onto the update:
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Samsung is the latest company to ban ChatGPT on fears that employees will share too much information that will become “common knowledge” and available to others who use the tool. When I talk to portfolio companies about using generative AI this is a common objection. I am old enough to remember when companies banned employees from the iphone for similar reasons — Blackberries were far more secure. Eventually though organizations will be pulled along. OpenAI will provide cover to make the legal team feel more comfortable, more and more people will be using it outside of work, and the companies that use it will be outcompeting those that don’t.
In the meantime Microsoft is going to provide a version of ChatGPT with guaranteed privacy and security. It will be just like ChatGPT, but you will need to pay a premium. Estimates are it will be 10x the price ($200/month vs $20/month). We now know the cost of privacy. It will be interesting to see who decides to pay it.
I have long said that privacy is just a public relations tool that companies and organizations use to get what they want. Privacy, like “freedom”, is something that everyone wants when asked, but are quick to give up in the name of convenience or price. Apple has leveraged “privacy” to kneecap competing advertisers (while Apple continues to track, but (conveniently) in a (in their definition) non-privacy breaking way because it is all under one roof — the owner of the platform).
On Facebook’s last earnings call in April, Mark Zuckerberg made it clear that the company’s investment in AI are working, and they are slowly clawing back (“effective”) tracking capabilities that were blocked from Apple’s changes. The result is that ads are working better, and that advertisers are willing to spend more:
Our AI work is also improving monetization. Reels monetization efficiency is up over 30% on Instagram and over 40% on Facebook quarter-over-quarter. Daily revenue from Advantage+ Shopping Campaigns is up 7x in the last six months.
The same is not true at other companies affected by Apple’s changes (like Snapchat, and even YouTube). The difference is that Facebook was able to throw extremely high amount of spend at the advertising tracking AI. The company’s is spending $30-$33B per year on capital expenditures, only a minor proportion of which is on VR and AR.
The cost of privacy: $180/month for an individual or ~$20 Billion+/year for a platform.
Keep it simple,
Edward