How Are Consumers Using Generative AI?

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How Are Consumers Using Generative AI?

According to Andreessen and Horowitz's latest report [Link] the GenAI landscape is marked by several key trends and insights:

1. Rapid Innovation and Newcomers: GenAI products are experiencing rapid growth, with 80% of the top 50 websites being new entrants. Many innovative consumer experiences are emerging, with only 5 products originating from big tech companies.

2. Funding and Model Diversity: About 48% of these GenAI products are bootstrapped, showcasing that it's possible to launch large AI products quickly with limited capital. Companies either build proprietary models, fine-tune existing ones, or create consumer interfaces on top of existing models, with proprietary model-based companies raising more funding on average.

3. ChatGPT's Dominance: ChatGPT remains the leader, representing 60% of total monthly traffic among the top 50 products. CharacterAI is emerging as a strong contender, particularly on mobile, but GenAI products are still smaller in scale compared to mainstream consumer platforms.

4. Categories in Demand: Large Language Model (LLM) chatbots dominate the GenAI landscape, with AI companions and content generation tools gaining popularity. Image generation is the leading use case, followed by prosumer writing tools and video generation. Model hubs like Civitai and Hugging Face also drive significant traffic.

5. Open Field for Competition: Many GenAI product categories lack a clear leader, with less than a 2x traffic gap between the top and second players in most cases. This, along with a trend towards specialization, suggests opportunities for new companies.

6. Organic Growth and Monetization: GenAI products largely rely on organic growth without paid marketing. Consumers are willing to pay for GenAI products, with most monetizing through subscriptions, averaging $21/month per user.

7. Mobile Apps Emerging: While many GenAI products start as web-based, some are successfully launching mobile apps. Prosumer design studio PhotoRoom, CharacterAI, and Speechify have gained traction on mobile, but most GenAI products still see the majority of traffic on the web.

In summary, the GenAI landscape is marked by rapid growth, diversity in funding and models, ChatGPT's dominance, emerging competition, organic growth, and the potential for mobile app expansion. Consumers are increasingly willing to pay for GenAI products, unlocking new value in the market.

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Apple plans to upgrade the App Store’s search engine

Apple is internally working on a search engine nicknamed “Pegasus” under the leadership of former Google executive John Giannandrea. The search engine which will be deeply embedded into iOS and macOS aims to enhance Apple's search capabilities by utilizing generative AI tools. While Apple's search engine may not rival Google's in power, the company's robust App Store ads business and tools like Business Connect could pave the way for a potential search engine launch. [Link]

Microsoft CEO says tech giants battling for content to build AI

Microsoft CEO Satya Nadella testified in the U.S. antitrust trial against Google, highlighting competition for content needed to train AI. Nadella expressed concerns about Google's exclusive deals with publishers, locking up content for AI training. The trial focuses on Google's alleged illegal payments to maintain its default search engine status on devices. Nadella mentioned that Microsoft tried to make Bing the default search on Apple devices but was rebuffed. The trial's judge questioned why Apple would choose Bing over Google given the latter's perceived quality. The case examines whether Google's dominance is due to quality or anti-competitive practices. [Link]

Want to know about the intersection of AI and creativity. Check this newsletter out!

Ten wild ways people are using ChatGPT's new vision feature

OpenAI's ChatGPT has introduced new vision features that allow users to engage with the AI by uploading images, resulting in creative and practical applications. Users can now identify movie scenes by sharing screenshots and receiving details about the film, its historical context, and IMDb ratings from ChatGPT. These capabilities leverage GPT-3.5 and GPT-4 to apply language reasoning skills to a variety of images, enhancing the AI's versatility. Users worldwide are exploring and sharing their experiences with these innovative features on social media. [Link]

You can now use the DALL-E 3 AI image generator inside Bing Chat

Microsoft has integrated OpenAI's DALL-E 3 model into Bing Chat and Bing Image Creator, offering users advanced image generation capabilities. This integration aims to improve prompt understanding and create more creative and photorealistic images. DALL-E 3 simplifies image creation by enabling users to interact with a chatbot, streamlining the process. Microsoft has also added safety features to prevent the generation of images of public figures, hateful, or NSFW content. They plan to use DALL-E technology in other applications, such as the Paint app called Paint Cocreator. While theoretically accessible to all, server overload issues have been reported. [Link]

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Flipped.ai Editorial Team