How small businesses are caught in the crossfire in the battle of the AI giants

The idea that technological progress is a universally positive force is being called into question.

Published: June 20, 2024, 10:00 IST

For many small businesses, the AI revolution is not a story of empowerment but of survival. But for freelancers and independent content creators, it tells different stories.

(Photo: iStock)

The air was thick with tension as the tech world watched an unprecedented battle unfold. On one side was OpenAI’s ChatGPT 4.0, a formidable force in the field of artificial intelligence. On the other hand, Google’s Gemini is an advanced but apparently struggling competitor in this high-stakes competition.

The echoes of this clash resonated well beyond the corridors of Silicon Valley, reaching the daily lives of small businesses and startups. As these tech titans battle for dominance, the collateral damage is already becoming apparent, with smaller players bearing the brunt of this seismic shift.

The story begins with the rapid rise of ChatGPT 4.0. OpenAI has constantly pushed the boundaries, and this latest iteration of its AI is no exception. Launched on March 14, 2023, GPT-4 quickly made waves with its enhanced capabilities, including improved accuracy in logic and reasoning tasks and its ability to process both text and images.

In two months, ChatGPT reached 100 million active users, setting the record for the fastest user growth in history. Capable of generating very human-like text, ChatGPT 4.0 has become an indispensable tool for a variety of applications. From customer service to content creation, businesses have enthusiastically adopted this technology to streamline operations and reduce costs. Its intuitive interface and impressive capabilities have set a new standard, which Google’s Gemini is desperately trying to match.

Google, a giant that has long dominated the search and AI landscape, finds itself in uncharted territory. The launch of Google Gemini was intended as a bold response to ChatGPT’s growing influence. However, the reception was lukewarm to say the least. Yes, people are heading towards the wonder of OpenAI.

Critics argue that Gemini is more of a reactionary product, a hodgepodge of borrowed ideas rather than a revolutionary innovation. This narrative is similar to that of the early 2000s, when Yahoo, once a giant in the search engine world, faltered under the pressure of a rapidly changing Internet and the rise of Google. At its peak in 2000, Yahoo was valued at more than $125 billion, but in 2017 it sold its core Internet business to Verizon for just $4.48 billion.

The implications of this struggle extend far beyond corporate boardrooms. Small businesses, often the first to adopt and innovate with new technologies, are caught in the crossfire. These companies, which cover sectors ranging from translation services to digital design, find themselves in a precarious situation.

As giants like OpenAI and Google devote resources to outperforming each other, the tools small businesses rely on are becoming either prohibitive or obsolete. For what? They are not funded; most of them are bootstrapped.

It’s like the quote: “When banks compete, customers win.” If you are an aspiring entrepreneur and want to start a technology business, you will think of many reasons not to start a new business today. Who knows? Tomorrow, your company’s main competition will be a subsidiary of a tech giant.

Take, for example, a small translation services company. Previously, they might have outsourced the translation to people, allowing human translators to focus on more complex, nuanced work. With the advent of ChatGPT 4.0, these tasks can now be handled with unprecedented precision and speed. Now these tasks are done in one click. What about the entire translation industry? Of course, we admit and know that these companies will not be completely wiped out, but there will surely be layoffs and fewer and fewer demands.

Google’s Gemini, while a potential alternative, does not yet offer the same level of sophistication, leaving these companies in a technological void. What if this were the case in the coming months?

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The design industry faces a similar situation. Independent graphic designers and small agencies have adopted AI-powered tools to improve productivity and creativity. Tools like DALL-E are evolving so quickly that small design firms that relied on basic or mediocre design with minimal effort are struggling.

This arms race results in frequent updates and changes, often without adequate support or documentation, leaving small businesses scrambling to keep up. The constant need to adapt is a challenge.

Video production and content creation are not spared either. The appeal of AI for automating tedious editing processes and generating compelling narratives is undeniable. ChatGPT’s $20 subscription gives you access to the web, grammar checking, high-quality blog creation, and more. Small content creators, who once thrived on the accessibility and simplicity of more gigs, now face a steep learning curve.

The broader economic landscape compounds these challenges. The COVID-19 pandemic has already pushed small businesses to their limits. As they begin to recover, they are hit by a new wave of disruption.

Amid this chaos among tech giants, there is a growing sense of disillusionment among small and medium-sized tech companies. These tools can code. Literally. In the blink of an eye.

The idea that technological progress is a universally positive force is being called into question. Technology that once promised to be a great equalizer is increasingly becoming an obstacle, reinforcing existing inequalities. And the bad news is that these tools and technologies are improving every second, forcing small businesses with limited cash flow and working capital to downsize or close their entire operation.

For many small businesses, the AI revolution is not a story of empowerment but of survival. But for freelancers and independent content creators, it tells different stories.

Delhi’s Pawan Chabra sees AI improving content editing with polished drafts, but believes it cannot replace compelling content creation. It makes searching, presenting and editing easier. Chandigarh-based Swapan Deep Kaur notes an increase in AI-generated content for overseas education consultancies. Initially adopted to reduce costs, companies were penalized by Google for AI-generated content, leading to more denials than new cases.

Lavinia D’Souza, a travel blogger in London, questions the impact of AI on SEO writing and blogging, citing increased plagiarism and decreased website traffic. Jennifer Willis in Portland lost a major client to AI, which affected her revenue. She is skeptical about the growing role of AI in writing despite her 30 years of experience. Tokyo’s Amanda Horiuchi finds AI beneficial for generating high-quality content, giving her a competitive edge with U.S. clients while emphasizing the importance of additional skills beyond writing.

As we watch this battle unfold, one can’t help but wonder if Google will find a way to regain its footing or if it will succumb to OpenAI’s relentless advance.

More importantly, what will be the fate of small businesses caught in the crossfire? Will they adapt and thrive in this new world, or will they be pushed to the brink of extinction, their voices drowned out by the noise of technological progress?

Only time will tell, but one thing is clear: the AI revolution is here, and its ripple effects are only just beginning to be felt.

(Bhavik Sarkhedi is a writer at Forbes India, a seasoned freelance writer whose stories have appeared in The New York Times, Forbes US, YourStory, HuffPost, Elite Daily, Times of India, Entrepreneur US and more.)

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