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Comment by godelski | Hacker News Reader

I don't get why companies lie like this. How much do they have to gain? It seems like they actually have a lot to lose.

What's crazy to me is that these tools are wildly impressive without the hype. As a ML researcher, there's a lot of cool things we've done but at the same time almost everything I see is vastly over hyped from papers to products. I think there's a kinda race to the bottom we've created and it's not helpful to any of us except maybe in the short term. Playing short term games isn't very smart, especially for companies like Google. Or maybe I completely misunderstand the environment we live in.

But then again, with the discussions in this thread[0] maybe there's a lot of people so ethically bankrupt that they don't even know how what they're doing is deceptive. Which is an entirely different and worse problem.

[0] https://news.ycombinator.com/item?id=38559582

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Because the same day they released the video our CEO was messaging me saying we have to get on Google's new stuff because it's so much better than GPT-4.

I said I was skeptical of the demo but, like all developments in the field, will try it out once they release it.

This also seems like equally poor decision making. Wouldn't you want to at least try things out before you make a hard switch? Chasing hype is costly.

Welcome to IT.... no seriously, this is how a lot of executives behave in IT.

The important thing for Google is to be part of the short list right now before adoption crystalizes. Over the next year or two a large chunk of early (late?) adopters will firmly commit to one (or maybe two) vendors for their generative AI and those decisions will be sticky.

So now is the time to do whatever it takes to get into the conversation ... which Google successfully did I think.

I have a daily call with my CEO and I'm counting down until he mentions Googles demo and asks why we're not using their AI technology. Then it will take an exorbitant amount of energy on my part to get him to understand how that demo was doctored.

> Playing short term games isn't very smart, especially for companies like Google. Or maybe I completely misunderstand the environment we live in.

It could be the principal-agent problem. The agent (employee and management) is optimizing for short-term career benefits and has no loyalty to Google's shareholders. They can quit after 3 years, so reputation damage to Google doesn't matter that much. But the shareholders want agents to optimize for longer-term things like reputation. Aligning those incentives is difficult. Shareholders try with good governance and material incentives tied to the stock price with a vesting schedule, but you're still going to get a level of disalignment.

I suppose this is where a cult-like culture of mission alignment can deliver value. If you convince/select your agents (employees) into actually believing in the mission, alignment follows from that.

Yeah I think that makes some sense. But you would think the CEO and top execs of the company would be trying to balance these forces rather than letting one dominate. You need pressures for short term but you can't abandon long term planning for short term optimization. Anyone who's worked with basic RL systems should be keenly aware of that and I'm most certain they teach this in business school. I mean it's not like these things don't come up multiple times a year.

There's some other explanations too. Maybe they thought the deception would fly under the radar, so it was rational according to cost-benefit analysis given available information. Maybe they fell for the human psychological bias of overvaluing near-term costs/benefits and undervaluing long-term costs/benefits. Maybe some deception was used internally when the demo was communicated to senior execs. Maybe the ego of being second place to OpenAI was too much and the shame avoidance/prestige seeking kicked in.

Here is the headline Business Today published just in case you wonder why businesses do this

"Google Gemini Outperforms Most Human Experts & GPT-4 I Artificial intelligence I Google’s DeepMind".

It's all marketing. Same reason why satya publically postes sama + others are joining a new team at MSFT to continue should the openai thing not work out.

I'm not sure how that is really responding to my question with an explanation. I'm well aware that its marketing and I'd hope my comment makes that clear. The question is why oversell the product, and frankly by a lot. Because people are going to find out, I mean the intent is that they use it after all.

I'm sure the marketing team can come up with good marketing that also isn't deceitful. The question is why pull a con when you already got something of value that customers would legitimately buy?

> I'm well aware that its marketing and I'd hope my comment makes that clear. The question is why oversell the product, and frankly by a lot.

Most marketing sells the dream, not the reality. There are just many shades of grey (although 50 tends to sell well).

I'm still not sure how that is responding to my comment. Have I said something that makes me seem naive of the existence of snake oil salesmen? I'm actually operating under the assumption that my comment, and especially followup, explicitly demonstrate my awareness of this.

Because it may significantly delay those customers from buying the other competing product. Yea, Google has something of value, but OpenAI seems to have something of more value and Google is frantically trying to keep OpenAI from eating the whole market.

Google stock rallied 5% ish the after the demo (though the stock didn’t move immediately). Then it gave back about 1% once the news broke that it was faked

That's not a great answer. We need to know the counterfactual question of "How much would google's stock have rallied after a realistic demo was given?" I would not have been surprised if the answer was also 5%. Almost certainly Google's stock would have risen after announcing Gemini. There are other long term questions too like about how this feeds into growing dissent against Google and trust. But what the stock did is only a small part of a much bigger and far more important question.

Edit: Can someone explain the downvotes? Is there a error in my response? I'm glad to learn but I'd appreciate a bit better feedback signal so that I can do so better instead of guessing.

Broad investor community was spooked by Gemini Ga being delayed to Q1 so this stunt was a good stop gap / distraction

And likely caused more long term harm since if they had to fake this they’re likely further behind

That's tomorrows problem, not todays. They are hoping to solve the issue by then, or find a new way to fake it another quarter.

Also pretty critically it moves the reckoning past the Q4/Q1 boundary, where annual budgets and performance reviews are being decided. That could be the difference between layoffs vs. hiring in your department, between departures vs. high morale, or between re-orgs vs. continued productivity. If you can fake it for an extra couple weeks, it might mean getting another year of continued funding, and with an extra year of continued funding you might just deliver what you originally promised.

Haha, this is the right Realpolitik interpretation for sure

Economist here who studies exactly this type of counterfactual analysis. You are completely right: the effect of Gemini can only be estimated if we factor in what the Alphabet stock price would have been in the same time but in a world without Gemini. This is actually very standard in financial economics. This type of effect can be calculated with econometric techniques that compare before/after for “treated” vs “untreated” units, but in instances such as these, where only one or a few units were affected, like Alphabet stock amongst hundreds of other companies, one could use techniques such as “synthetic controls”. The intuition is to use other companies’ data to estimate before Gemini how Alphabet stock prices move over time, and then use that relationship to estimate a post-Gemini version of no-Gemini Google. The difference between the actual stock price and that counterfactual is the effect of interest; whether it is a significant effect or just random noise can be established by a number of auxiliary statistical tests. For more info, see [0].

[0] Abadie, A. (2021). Using synthetic controls: Feasibility, data requirements, and methodological aspects. Journal of Economic Literature, 59(2), 391-425.

Well I don't mean with/without Gemini, I mean without the deceptive marketing of Gemini vs had they counterfactually produced a non-deceptive marketing. Other than that nitpicking, I appreciate the backup and the source. Counterfactual testing is by no means easy, so good luck with your work! My gf is an economist but on the macro side. You guys have it tough. I'm a bit confused why people are disliking my comment but mostly that they are doing so without explanation lol.

> I would not have been surprised if the answer was also 5%

Given the sensitivity of the market with any company perceived to be lagging behind AI developments, I wouldn't be surprised that their stock price would drop by a couple % if the demo underwhelmed.

So the whole thing is basically a ethical question of "how far can we go with polishing our demo until it becomes an unacceptable fake?" In an ideal world you'd never want to be caught in such a dilemma.

One question I've long had is why short-term changes in stock prices seem to matter so much to companies like these. Is it just that the short-term changes are seen as harbingers of longer-term trends, or is there a concrete reason to play games to get temporary boosts to stock price?

Short term changes definitely affect medium to long terms' price. Because at one level stock price is more like casino and isn't actually related to the company's performance. e.g. See the 5 year history of gamestop. Its price once increased due to random activity from redditors and its stock price is still increased due to that.

I've been using the term Goodhart's Hell to describe what I see as a system of metric hacking and shortsightedness. I do think there's systems encouraging people to meet metrics for metrics sake but not stopping to understand the metric or what it actually measures, and most importantly, how that differs from the actual goals. Because all metrics are proxies and far from complete, even for things that sound really simple. I think this is because we've gotten so good at measuring that we've innately forgotten about the noisiness of the system where when we weren't good at measuring that was just forced upon us in a clear manner.

But I really don't get it either. One of the things that really sets humans apart from other animals is our capacity to perform long term planning and prediction. Why abandon that skill instead of exploiting it to its maximum potential?

A CEO's/company's job is to maximize instantaneous shareholder value. Anything else is a waste of time, since investors are assumed to take long-term vs short-term risk preference into their own hands. The company is essentially a machine that investors can dip into and dip out of at any time, so it doesn't make sense to make decisions to move the stock price over a pre-planned certain time horizon. The reason companies invest in any long-term projects at all is because the net present value of those projects affects the stock price.

That certainly feels like how they're acting, but what about the actual incentive structures cause it to be this way? Why does the company benefit from being a good machine for generating short-term profits for short-term investors?

This is what I'm trying to get at with my questions. I think it is easy to give an answer of short term thinking and move on. But that's not a real answer. I want to understand the incentive structures that have led to this (and this "Goodhart's Hell") situation and if it's unstable as I presume.

There's a specific concern because of the large sentiment that the big difference between industry and academia is that in industry your products have to actually work. Ignoring the weird premise and ignoring the different TRL context, I'm not convinced that industry needs to actually make usable products. Aren't we also all complaining about how shit isn't working adequately? Google failing at seemingly simple things, and decreased quality of search. Amazon being a shitty monopoly and exploiting that to be anti-consumerism and not dealing with obvious spam and product manipulation that could be detected by a Naive Bayes filter. Or Twitter being overrun with spam bots that also could trivially be detected from a Naive Bayes filter or my block list, but blocking them actually decreases the visibility of my tweets so I'm actively encouraged by the platform to let these bots exist and follow me and like my comments.

And why would investors want this? I don't buy that there's an exclusive desire for quarterly profits and that Wallstreet does look for a diversification of their portfolios for long term blue chip stocks as well as short term gambles. That it'd require absolute insanity for a CEO or board to allow short term incentives to drive a well established company.

I really do think there's something going on but we're afraid to ask the deeper questions because we don't know the answers but I want to be encouraging that discussion even if it is thinking out loud. But maybe that insanity exists and this frustration is a result of a demonstration of it. But I don't want to believe that because I think humans are capable of so much more. That even the average person is better than an LLM but there's just issues of communication. Because even idiocracy is driven by incentive structures so I don't buy the "lol people dumb" argument, even if using better words and wrapped up in a nice bow.

It made me feel, more than I have ever felt before, that Google is now run by non-technical business people who don't seem to understand that many people who have at least some awareness of how this technology works, and so are probably going to be part of the decision-making process on whether to use it and other Google products, can immediately see that it is faked and are often the type of people who react very negatively to such deceptive practices.

Google screws up every business opportunity, including wantonly buying small successful businesses and killing them. Dishonesty is a fundamental part of the company.

Relatedly, I saw in the thread that people call these types of deceptions as “smoke and mirrors” or “dog and pony show”. What happened to “Potemkin”?!

I had never previously heard of that term but it does seem apt. I think idioms are often more cultural and can change rapidly while one might seem ubiquitous in your group it isn't in another. Another term I think might be apt, but a bit less so, is snake oil or snake oils sells man.

Perhaps this is revealing my ignorance, but I've never even heard of potemkin before

If you grew up post USSR era it has probably fallen out of the lexicon for younger folk…

The nice thing about "Potemkin" is that there's a decent chance the video was also designed to fool their own CEOs (in response to an impossible request), just as the Potemkin Villages were used to fool the country's own ruler.

Potemkin product launch is the correct label.

I’d wager most aren’t familiar with the term, and the majority of those who are will think of the battleship/movie, not the villages.

https://en.wikipedia.org/wiki/Russian_battleship_Potemkin

https://en.wikipedia.org/wiki/Potemkin_village

> What's crazy to me is that these tools are wildly impressive without the hype.

My wife and I were talking about this yesterday, and I made this exact point! I told her I’m convinced Google was deceptive like this for the Wall Street crowd and normies, because to techies and researchers who actually understand AI, the extra BS is unnecessary if the technology is legitimately impressive.

> I don't get why companies lie like this.

The answer is always “money”. All you have to do is think “what line of thought would lead someone to believe that by lying in this manner they’ll either lose less money or make more of it?”

I think it's because, while I think these LLMs are incredibly interesting and can be very useful, they're less than what the hype is and the valuations are based on the hype.

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