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Victoria Craig
Welcome to Tech News briefing. It's Thursday, April 3rd. I'm Victoria Craig for the Wall Street Journal. Elon Musk has thrown out the rule book again. This time not in the White House, but on Wall Street. With a mega me then finding it harder to filter through Google's results these days. Our tech columnist quit the world's leading search engine cold turkey and her results might surprise you. First, it could be considered the biggest deal of the year. The tie up between social media company X and artificial intelligence startup xai. Except it's not your run of the mill merger. That's because both companies are private and owned by billionaire tech titan Elon Musk. And the deal has broken all the normal rules. WSJ deals reporter Ben Glickman is helping break it all down. Ben, we'll get to the unorthodox nature of this in a second, but just start by telling us the reason for this merger.
Ben Glickman
Well, there's already a lot of overlap between the two companies. They share GPUs, like these chips that power AI processing. They already share some resources and obviously they are both trying to get a share of Musk's attention. So there is some overlap and a rationale for why they would be working together.
Joanna Stern
So plenty of synergies I suppose we could say. But this deal is raising lots of eyebrows for many, many reasons. And one is the valuation which one professor told you is like using Monopoly money to buy Pokemon cards. Why is that?
Ben Glickman
This is being structured as an all stock deal and the way that works is that both companies are basically trading in their shares for new shares in a combined holding company. But the negotiations over valuation and basically how many shares of the new company are based on negotiating an exchange rate between the two shares essentially. So no cash is changing hands and at the end of the day no one really has a change in the value of what they hold. So the way that one person put it to me was that structurally this deal would be exactly the same if they decided to value the company at $113 instead of $113 billion.
Joanna Stern
And was there something also about how the valuation of X didn't actually change or it changed too much from when Elon Musk purchased it?
Ben Glickman
X had recently had a fundraising round that valued it at about 44 billion, including debt, which is the price that Elon paid And this is basically consistent with that. The $33 billion price tag for X excludes their debt, so that's behind the X valuation. But the $80 billion valuation for Xai was a relatively big jump from its last fundraising round, which was late last year, which was $50 billion. So 50 to 80, it's quite a leap.
Victoria Craig
Another aspect of this is that usually with a deal like this, you've got lawyers and advisors on both sides. They' same people who are working on trying to hammer out this deal. In this case, it was the same people for both sides.
Ben Glickman
It is not typical that they would have the same advisors on both sides. There's sort of a cliche about the deal making world, which is that it's very heated, competitive, kind of cutthroat world where both sides are really battling. Experts I spoke to did say that there is precedent for companies using the same advisor on both sides of the transaction, but it's more likely to be in sort of small, already connected companies. But for a deal of this size, it is certainly unprecedented. I could not find another example of this being the case. That brings us to another oddity about this deal, which is that in a historical sense, mergers of this size are very rarely between private companies.
Joanna Stern
And what does this say about Elon Musk's standing with investors on Wall Street?
Ben Glickman
It's a very positive sign for this certain cohort of kind of insider investors. This was private funding. So Musk had say over who was investing in XAI and in X when he made the deal. A lot of known investors in one or both of these companies were cheering the deal, saying that this is a huge step forward for both of them, that this was a move that really made a lot of sense. So to a certain extent it signals that there is a very dedicated part of the funding community that is very much buying into Elon Musk. They're willing to back his ventures. They are not likely to be deterred by him doing some slightly unorthodox business dealings with two companies that he controls.
Victoria Craig
That was WSJ deals reporter Ben Glickman. Coming up, if you're tired of sifting through a bunch of search junk when you just want a simple answer, our tech columnist might have just the solution. We'll get the 411 after the break.
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Victoria Craig
If you want to know the score of last night's baseball game. The reason your back might be aching or what foods dogs are allergic to. Who or what do you ask your first go to is probably Google, the platform that has dominated Internet search for what feels like forever. But WSJ senior tech columnist Joanna Stern has become fed up with the overwhelming number of ads and sponsored links before getting any really relevant results. So she cut ties. Joanna Quitting Google, I must say, seems very scary, especially given how much I rely on it in my personal life. Was it scary?
Robbie Stein
You'll be okay. I'm telling you, life can be as good, if not better.
Joanna Stern
That's quite a statement. I mean, how did you do it? What specifically did you eliminate and how did you replace Google?
Robbie Stein
I think it's important to back up and remind ourselves that Google's not a very good product. Google search we all use Google in probably many other ways. Email, calendar. But when you look at the search product and you just go and search and everyone can go and do that, go search for a product, go search for a question, you were just bombarded with a lot of crap. Sponsored links, SEO junk, lots of ads. And so somewhere along the line, when Google grew to 90% search market, they just didn't have to care about the user experience. And finding an answer to a question became harder. Using AI has helped me get to better sites and find answers quicker and go to the sites that have the depth and the information that I need.
Victoria Craig
So which platforms did you replace Google with and how did you find interacting with them? Was it easier than Google?
Robbie Stein
I'm a big ChatGPT user. I also use Anthropic's Claude. Claude just added web integration. Perplexity was a really big one. I actually found Perplexity to be one of the best ways to get real time web information. I also tried Microsoft Copilot. I also tried Google's new AI mode in search. I tested a lot of these.
Joanna Stern
One of the things I feel like I rely most on Google for is Maps. So how did you replace Maps?
Robbie Stein
There are some places where it is very clear AI is better and then there are places where you still will want to go to Google. And one of them is for finding local search or maps or even local information about hours to restaurants or hours to stores or retailers. So those are some places that Google is better. Another place that I think Google is certainly better is if you know that website you want to go to but you don't remember the exact URL. Google is still the quickest way to get to the things you know you need to get to on the Internet. But if you don't know the answer, that's where AI really can speed up the process and be very helpful.
Victoria Craig
When we talk about AI, we think about the hallucination issue as a really big problem.
Joanna Stern
That's when AI just makes stuff up.
Victoria Craig
And it's just not true. Was accuracy a concern for you as you set out on this Googleess adventure?
Robbie Stein
It was. And there are certainly times you get wrong answers. But if you know you need something that's really accurate or you really want the details, the question is, am I missing any reliable sources? And that is a real big question and concern I have about these tools. Right. The more we get an answer from AI and then we rely on, oh, where was the citation? Or we even don't even go to the citation, then what happens to the publishers, Places like us like the Wall Street Journal, people aren't clicking through, People aren't getting that vetted information. And I also knocked these AI companies for making those citations so small. Like, I'm not going to click that tiny little link. It's really important to click those links and the AI company should make them bigger.
Victoria Craig
And did you get any comment from any of these AI companies or from Google on this adventure you embarked on?
Robbie Stein
I spoke to Robbie Stein, who's Google's vice president of product for search. And first I asked him why Google has so many AI options. Because I think that people can get lost. So there's AI overviews which shows up at the top of some search results. Then they've got the Gemini chatbot, then they have a new AI mode which is not available to everyone yet. But I really do think is the future of Google search. And so we talked a lot about AI mode and some of the early findings that Google's finding from both AI overviews and AI mode. Because I was really focused on this question, what if people stop clicking? And he assured me that Google really does find it important to get people to the open web. That is what Google is built on. That's what these AI tools are built on. He also really did back up what I have been saying, which is you go to the Google list of links, you click one, you go, oh, that's not it. You hit the back button, you go to another one. Nope, go to the back button. He argues. And I actually saw this in my own experience, that you're going to sites that are going to be more meaningful, that are going to have that deeper information, and you spend more time there.
Joanna Stern
When you talk about this AI mode Since you've had an opportunity to use it on Google, does that give you the same kind of experience that you liked on platforms like ChatGPT?
Robbie Stein
I'll describe this AI mode for people. Basically you go to google.com and if you've been given special access to this AI mode, which eventually they'll start rolling out to more alongside the usual tabs at the top like images or news, you'll see this AI mode. And so you go to that and it is more of a chatbot feel and so you could ask questions. The example that I had in my story was a 3D printer under $500. That's good for kids. It gave me back a list of a couple of printers. It gave me a bulleted list of the top features of each of those, gave me some links on the side and then within line of the actual suggestions. The first one was a toy box 3D printer. It had links to where I could go to find more information about those. It is much cleaner. It is much quicker to get to an answer that These are the three top 3D printers and you can now go find more information about it versus Google Search, which is like a wall of just pictures and information. And you're just like, what? I don't know, like I'm going to click around here for 40 minutes and maybe find an answer. This is why I think this is the future of Google search and search in general.
Victoria Craig
That was WSJ senior tech columnist Joanna Stern. And that's it for Tech News Briefing. Today's show was produced by Jess Jupiter and Jul with supervising producer Emily Martosi. I'm Victoria Craig for the Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.
Comcast Business
With leading networking and connectivity, advanced cybersecurity and expert partnership Comcast business helps turn today's enterprises into engines of modern business. Powering the engine of modern business powering possibilities. Restrictions apply.
WSJ Tech News Briefing: How to Ditch Google Search
Release Date: April 3, 2025
Host: Victoria Craig
Produced by: The Wall Street Journal
Overview
Elon Musk continues to redefine industry norms with a significant merger between his social media company, X, and the artificial intelligence startup, Xai. This unprecedented union between two private, Musk-owned entities has stirred considerable attention within the tech and financial communities.
Key Points
Rationale Behind the Merger:
Ben Glickman, WSJ Deals Reporter, explains that both X and Xai share substantial resources, including GPUs essential for AI processing. This synergy aims to consolidate Musk’s ventures, enhancing their technological capabilities and market presence.
“There is some overlap and a rationale for why they would be working together,” Glickman notes (01:18).
Valuation Concerns:
The merger, structured as an all-stock deal, has drawn criticism for its unconventional valuation approach. Ben Glickman highlights that the exchange rate between the companies’ shares has led some observers to liken the valuation to “using Monopoly money to buy Pokémon cards.”
“Structurally this deal would be exactly the same if they decided to value the company at $113 instead of $113 billion,” Glickman elaborates (01:54).
Use of Shared Advisors:
A notable irregularity is the use of identical legal and advisory teams for both companies, which is highly uncommon in large-scale mergers. Glickman remarks, “For a deal of this size, it is certainly unprecedented,” underscoring the uniqueness of this arrangement (03:29).
Investor Confidence in Musk:
The merger signals strong support from a dedicated group of private investors who trust Musk’s vision. Glickman points out that this backing reflects Musk’s solid standing within certain investment circles, despite the unconventional nature of the deal (04:15).
Conclusion
The merger between X and Xai exemplifies Musk’s distinctive approach to business, merging social media and artificial intelligence under a unified strategy. While the deal raises eyebrows due to its valuation and advisory overlaps, it underscores Musk’s influence and the confidence of his inner investor circle.
Overview
WSJ Senior Tech Columnist Joanna Stern has taken a bold step by abandoning Google Search, citing frustration with its cluttered interface dominated by ads and sponsored links. Her transition to alternative AI-powered search solutions offers insights into the evolving landscape of internet search.
Key Points
Reasons for Leaving Google:
Joanna Stern shares her dissatisfaction with Google’s search experience, particularly the overwhelming number of ads and irrelevant results that hinder finding meaningful information.
“Sponsored links, SEO junk, lots of ads. … finding an answer to a question became harder,” Stern explains (06:19).
Adopting AI Alternatives:
To replace Google, Stern turned to several AI-driven platforms, including ChatGPT, Anthropic’s Claude (with recent web integration), Perplexity, and Microsoft Copilot. She found Perplexity particularly effective for accessing real-time web information.
“I actually found Perplexity to be one of the best ways to get real-time web information,” Stern notes (07:18).
Replacing Google Maps:
While AI tools excel in general search inquiries, Stern acknowledges that Google still outperforms alternatives in specialized areas like maps and local searches.
“If you know that website you want to go to but you don't remember the exact URL, Google is still the quickest way,” she observes (07:43).
Addressing AI Accuracy and Hallucinations:
Stern voices concerns about the reliability of AI-generated answers, known as "hallucinations," where AI might provide inaccurate information. She emphasizes the importance of verifying sources and criticizes AI companies for making citation links too inconspicuous.
“I also knocked these AI companies for making those citations so small,” Stern states (08:25).
Google’s Response and Future of Search:
In a conversation with Robbie Stein, Google’s Vice President of Product for Search, Stern explores Google's AI mode. Stein advocates for this new feature, highlighting its efficiency and potential to enhance user experience by providing cleaner, more direct answers compared to traditional search results.
“This is why I think this is the future of Google search and search in general,” Stein asserts (10:25).
Conclusion
Joanna Stern’s departure from Google Search illustrates a growing trend toward AI-powered alternatives that prioritize user experience and efficiency. While AI tools offer significant improvements in information retrieval, challenges related to accuracy and source reliability remain. Google's advancement in integrating AI features signals an evolving search landscape aimed at addressing these user concerns.
Ben Glickman on Merger Rationale:
“There is some overlap and a rationale for why they would be working together.” (01:18)
Ben Glickman on Valuation Criticism:
“Structurally this deal would be exactly the same if they decided to value the company at $113 instead of $113 billion.” (01:54)
Robbie Stein on AI Mode:
“This is why I think this is the future of Google search and search in general.” (10:25)
Joanna Stern on AI Citations:
“I also knocked these AI companies for making those citations so small.” (08:25)
The episode "How to Ditch Google Search" delves into significant shifts within the tech industry, from high-profile mergers orchestrated by Elon Musk to individual tech leaders reassessing their reliance on established platforms like Google. These discussions highlight the dynamic nature of technology and the continuous pursuit of more efficient and user-friendly solutions.
For more insights and expert analysis, stay tuned to the Wall Street Journal’s Tech News Briefing.