Google’s AI blunders rival Xerox’s PC mistakes

Also: Athletes get paid and river barges get wider. [Bloomberg]( This is Bloomberg Opinion Today, a highly productive R&D lab of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - [Google lost]( some top AI talent. - Where [big baseball paychecks]( came from. - The upside of [fewer meetings](. - [Flatter barges]( in a shallower Rhine. Google’s AI Geniuses Have Left the Building The greatest cautionary tale in the history of corporate research and development is Xerox Parc. The Palo Alto Research Center of the then-high-flying copier maker opened its doors in 1970, and over the next few years its employees proceeded to invent [several]( of the most important tools of modern technological life, from graphical user interfaces to networked computers. It was not Xerox, though, that commercialized these innovations. “Why aren’t you doing anything with this? This is the greatest thing,” [shouted]( a young Parc visitor in 1979 after seeing a demonstration of a Xerox Alto computer with mouse and on-screen windows. “This is revolutionary!” Five years later the visitor, Steve Jobs, unveiled the Alto-inspired Apple Macintosh computer. The rest is history, albeit convoluted history given that Microsoft’s Macintosh-inspired Windows operating system then nearly wiped Apple off the map before the latter’s rebirth and iPhone-fueled rise to the top of the global corporate heap. Parc still exists, as [part]( of the nonprofit research institute SRI International. Xerox Holdings Corp. is still around, too, and modestly profitable. Its $2.5 billion market cap is 0.08% of Apple’s, 0.1% of Microsoft’s and 0.16% of Google parent Alphabet’s. These days Alphabet has the world’s highest-profile [R&D operation](. (Amazon.com Inc. tops it in global [R&D spending rankings]( but that’s partly because Amazon refuses to break out R&D in its earnings statements, reporting spending on a broader category that it calls “technology and content” instead.) Its leadership has been trying hard to avoid Xerox’s fate, renaming the company Alphabet in 2015 in part to signal that its R&D investments are meant to grow into other big businesses alongside Google. They still have an awfully long way to go. In the [quarter]( that ended March 31, Alphabet’s non-Google “Other Bets” generated just 0.4% of company revenue. And as Parmy Olson [tells it](, the company’s best idea generators aren’t exactly sticking around. Parmy describes how a [2017 paper]( by eight Google researchers has been crucial to recent advances in artificial intelligence (it proposed a new network architecture called the Transformer that is the “T” in ChatGPT), and details what has happened to the co-authors. One works at ChatGPT creator OpenAI, six have founded or co-founded startups, and the last one is about to leave Google to do so. This can be seen as testament to the continued health of the Silicon Valley startup ecosystem, which after a pretty tough year is still luring smart people away from big companies. The story also may end with Alphabet and other tech giants buying up most of the AI startups. Still, reading Parmy’s account of how Google failed to incorporate the Transformer technology into its products, even as outside firms did, I was struck by this thought: The curse of Xerox Parc hasn’t entirely gone away. Paying to Play There’s a lot of money in sports! With baseball dual threat Shohei Ohtani now shopping himself around for a payday that could top half a billion dollars, historian Stephen Mihm [recounts]( how big paychecks first came to baseball in the 1970s. Before then, Major League players were effectively the property of the teams they played for, and had no real bargaining power to force pay increases. That wasn’t how things had worked in the Negro Leagues, and it’s probably not a coincidence that it was a Black player, Curt Flood of the St. Louis Cardinals, who led the challenge to baseball’s so-called reserve clause. The US Supreme Court [ruled against Flood]( in 1972, but other players subsequently won a relaxation of the reserve clause and much bigger pay packages. In 2021, the Supreme Court unanimously took the opposite side in an athlete-pay dispute, [ruling that]( the National Collegiate Athletic Association could no longer impose strict compensation limits on college athletes. Since then so-called “name, image and license” deals have exploded, with an estimated $900 million handed out from July 2021 to July 2022. That’s fine, [writes]( Adam Minter, but without more transparency on who’s getting paid what, college sports is headed for an era of controversy and possible corruption. Telltale Charts Want happier, more productive employees? Ban meetings, at least for most of the workweek. Sarah Green Carmichael [says]( this is one of several promising approaches for reducing meeting creep. Water levels in the Rhine are very low again this summer, endangering Northern Europe’s supply chains. But Javier Blas [has the details]( on a German innovation that may help solve the problem: wider barges with shallower drafts. Further Reading Exxon [bets big]( on carbon capture. — Liam Denning AMLO empowers [Mexico’s military](. — Eduardo Porter There could still be [a recession](. — Allison Schrager [Industrial demand]( is iffy. — Brooke Sutherland NATO’s [Arctic opportunity](. — James Stavridis [Biden is right]( on cluster bombs. — Bloomberg’s editorial board Celsius [was lying](. — Matt Levine ICYMI Cargill bought [a lot of cocoa](. [Crypto CEO]( charged with fraud. OTC birth control pill [is approved](. Kickers Watch out for the [surfing sea otter](. Many [moon landings]( are in the works. [Farewell](, Anchor Steam Beer. Notes: Please send ideas for world-changing technological advances and feedback to Justin Fox at justinfox@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us Like getting this newsletter? 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