Latest / Best of Business / Sam Dickie: Fisher Funds expert on the launch of Meta's new AI assistant Muse

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Sam Dickie: Fisher Funds expert on the launch of Meta's new AI assistant Muse · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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  Speaker 2: Now, Meta launched an AI assistant this month that does
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  Speaker 2: your shopping for you. Went straight to number one on
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  Speaker 2: the app stores, and then Amazon just slammed the door
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  Speaker 2: in its face. Sam Dickey from Fisher Funds is with us.
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  Speaker 3: Hello, Sam.
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  Speaker 1: Hi, Heather.
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  Speaker 3: What's going on here, then?
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  Speaker 1: So, Meta launched Muse two weeks ago, and this isn't
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  Speaker 1: just a chatbot that answers questions. Like you said, it
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  Speaker 1: does the job. It clears your inbox, buys the thing
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  Speaker 1: and pays for it. And it went to number one
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  Speaker 1: on the App Store. 2.5 million downloads in 13 days,
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  Speaker 1: a lot more successful than ChatGPT. And last Sunday, Amazon
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  Speaker 1: blocked it. They just cut it off. They've also sued
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  Speaker 1: another one of these shopping bot type competitors. So the
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  Speaker 1: biggest retailer on earth just refused to let a robot
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  Speaker 1: come shopping on their walled garden.
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  Speaker 3: So why is everyone suddenly just racing at this?
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  Speaker 1: Well, this is sort of the holy grail. So we've
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  Speaker 1: always been talking about what is the AI killer app
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  Speaker 1: for the consumer. So this could be it. Whoever owns
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  Speaker 1: the assistant, the AI assistant owns the decision. And Google,
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  Speaker 1: of course, built a $ 2 trillion company deciding which blue
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  Speaker 1: link you click. And that decides what you actually buy.
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  Speaker 1: And here's what's fascinating. The consumer race was left wide
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  Speaker 1: open because OpenAI and even Anthropic and certainly like Perplexity
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  Speaker 1: and others of these AI models initially were going after
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  Speaker 1: the consumer, but the consumer in tech land has always
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  Speaker 1: been notoriously hard to extract revenue out of. So they
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  Speaker 1: all sort of pivoted and went down the corporate or
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  Speaker 1: the business route and everyone followed Anthropic because they were
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  Speaker 1: doing so well. So the space has been left wide open. Apple's, obviously,
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  Speaker 1: it's theirs to lose to an extent because you've got
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  Speaker 1: the AI, personal digital assistant sort of delivery mechanism in
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  Speaker 1: your hand. But I think we all know that Siri's
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  Speaker 1: been a bit of a punchline joke for half a
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  Speaker 1: decade now. And Google itself has the most to lose
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  Speaker 1: because it would be effectively eating its own search ads.
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  Speaker 1: And Meta's really got nothing to protect there.
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  Speaker 3: Is that the explanation then for why Amazon slammed the door?
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  Speaker 1: Yeah, well, Amazon's got sort of 35% to 40% of
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  Speaker 1: the US online retail or e-commerce market. And it generates
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  Speaker 1: a huge amount of advertising revenue from that. And that's very,
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  Speaker 1: very high profit margin. A reasonably small part of its revenue,
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  Speaker 1: but a huge part of its profits. And of course,
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  Speaker 1: those are banner ads. So when you go in and
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  Speaker 1: look for your hiking boots on Amazon, people would have
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  Speaker 1: paid them for their hiking boots to the float to
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  Speaker 1: the top of the list. But the bot doesn't care.
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  Speaker 1: It's got no eyes. It just reads zeros and ones.
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  Speaker 1: So a lot of that advertising can become a little
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  Speaker 1: bit less relevant, and that's a big risk for Amazon,
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  Speaker 1: so it's closing the doors on these shopping bots for now.
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  Speaker 3: Oh, interesting. What does all of it mean then for investors?
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  Speaker 1: Well, I think there's going to be some winners and
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  Speaker 1: losers out of this, as there always is, and it
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  Speaker 1: all depends whether you've got something to lose. So Google
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  Speaker 1: will probably compete here as well, but it's got a
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  Speaker 1: very big, very profitable commercial search business based upon traditional advertising,
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  Speaker 1: where you pay to have your link at the top
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  Speaker 1: of the page, and this is it, that's sort of
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  Speaker 1: the new paradigm. Meta, if it just converts 1% of
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  Speaker 1: its 3.6 billion users to its $ 20 a month plan,
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  Speaker 1: that's about $ 9 billion in revenue. So Meta's got quite
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  Speaker 1: a bit of upside. But the thing is, consumers have
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  Speaker 1: never really been that keen to pay for or a
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  Speaker 1: subscription fee for something they don't use every day. I mean,
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  Speaker 1: some people shop online every day. I certainly don't. I'm
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  Speaker 1: happy to pay for Netflix because you use it every day.
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  Speaker 1: So really these consumer apps will probably have to monetize
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  Speaker 1: via selling ads. And therein lies the rub because the
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  Speaker 1: sort of value prop to the consumer is that these
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  Speaker 1: bots are not influenced by advertising dollars. They're just pure
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  Speaker 1: objective animals that are hunting around for the best value thing.
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  Speaker 1: But to monetize this, the company is going to have
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  Speaker 1: to make them a little bit subjective. So that's going
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  Speaker 1: to be an interesting battle playing out.
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  Speaker 3: Yeah, it is very interesting, this stuff.
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  Speaker 2: I'm really interested to see how it plays out. Sam,
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  Speaker 2: thank you as always. Fascinating chat. Sam Dickey, Fisher Funds.