Google’s $1 billion Australian plan is really just a cloud and AI play

Google has announced a $1 billion investment in Australia over five years, bringing with it thousands of new jobs, along with ‘digital infrastructure’ to help businesses in the post-COVID recovery period.

Prime Minister Scott Morrison amicably shook hands with Google Australia Managing Director, Mel Silva, at Google’s newly-expanded offices in Sydney, less than a year after the company threatened to end its flagship Search product in Australia over a piece of legislation – the News Media Bargaining Code.

Speaking at Tuesday’s announcement, Morrison acted as a spokesperson for Google, talking up the company’s “major benefits for Australian businesses”.

“It’ll help keep Australian businesses connected with the best digital infrastructure, making them more productive and resilient,” he said of the planned $1 billion worth of investments.

“It will bring more STEM jobs to our shores across engineering, computing science and AI.”

According to a 37-page report that accompanied the announcement, in the Prime Minister’s words, the “major benefits” of Google, the US tech giant’s latest investment program can be divided into three streams:

1. Digital infrastructure, local engineers, and office space
2. The creation of an Australian Google Research Hub
3. Building partnerships with government, commercial, and academic researchers.

Sources say roughly a third of the $1 billion will go toward developing its cloud products for the Australian market.

 

Head in the clouds

For businesses, those Google products range from simple infrastructure like data storage to Google’s collaborative productivity suite that includes document editing and video conferencing software.

But it could also mean the use of more advanced cloud-based computing and AI technologies, such as when Optus used Google’s AI to develop a real-time phone call translation service.

“If we want our digital economy to grow, we need to expand the skills, platforms, and foundations that businesses and organisations from all corners of the country build on every day,” Silva said.

“This investment will provide Australian businesses with a secure and robust platform for business transformation.

“It’ll enable them to become more productive and quickly respond to ever-changing customer needs, as they grow their business and the digital economy.”

Deliberate wording from both the Prime Minister and the head of Google Australia make it seem as though the company is spending money in Australia for altruistic purposes like helping the business community or solving problems “from bushfires to mental health and cancer diagnosis”.

But make no mistake: Google is selling its cloud services.

The expansion of Google Cloud is a core part of parent company Alphabet’s corporate strategy as it looks to compete with the likes of Amazon Web Services and Microsoft Azure for cloud computing market share.

Alphabet saw a 45% increase in cloud revenue last quarter and the segment is edging toward profitability as Google continues to see returns from investments like the one Morrison was talking up this week.

Cloud investment also helps Google diversify from its heavy reliance on advertising revenue that made up the bulk (US$59 billion) of Alphabet’s US$65 billion revenue in the September quarter and which has been built on exceedingly dominant market positions in AdTech and Search that are the subject of inquiries by the consumer watchdog.

Google Australia paid $50 million in tax in 2018-19 from its $1 billion income, according to the Australian Tax Office, and it will be hoping an equivalent investment will yield significant returns for the company that just finished renovating its Sydney campus – which now occupies serious real estate between the Star casino and yachts moored in Pyrmont Bay – and is looking to expand on its large local engineering team.

 

Capturing Australian research

Other than building ‘digital infrastructure’ to sell to Australian companies, Google Australia’s investment here will see it establish a local Research Hub alongside research partnerships.

That includes a “five-year, multi-million dollar partnership” with Australia’s science agency, the CSIRO.

CSIRO Chief Executive Dr Larry Marshall fawned over the Google deal on Tuesday, saying the corporate spending “will supercharge our emerging innovation ecosystem”.

“We’re both focused on using science and technology to change the rules of the game, and by working with Australia’s national science agency, we can deliver the seemingly impossible trifecta of sustainable and societal benefit at the same time as profits,” he said.

Artificial intelligence is at the heart of Google’s Australian research aims, pointing toward the ongoing incursion of big tech on academic and independent computer science and artificial intelligence research.

This is in an ongoing source of concern for academics and scientists who have pointed out the potential for conflict between a profit-driven multinational company and the scientific community.

Battles in this conflict have already played out, notably when Google parted ways with AI researcher Timnit Gebru after she published research critical of the company’s approach to building ever-larger language models.

It was a very public dispute that brought forward discussion about the imbalance of power big tech holds when it comes to AI research.

Meredith Whittaker, a Faculty Director at the AI Now Institute and former Google employee, recently published an article that is deeply critical of what she describes as big tech’s “capture” of academic spaces.

“These companies control the tooling, development environments, languages, and software that define the AI research process – they make the water in which AI research swims,” Whittaker said.

Whittaker paints a bleak picture of the current AI research field in which academic researchers are reliant on resources like AI models, supercomputers, and cloud infrastructure built by the same tech companies that are actively poaching staff to suit their research purposes.

This dynamic set the state for soft capture. Which we see in everything from Big Tech sponsored PhD programs, to corporate labs in the middle of universities, to dual appointments in which researchers keep their university title while being paid tech worker salaries.

— Meredith Whittaker (@mer__edith) November 16, 2021

She was careful to note that the close ties between industry and research institutions doesn’t mean AI researchers are “compromised” but it does limit how this field, which has dramatic implications for society and humanity overall, is developed for the public interest.

“The terms of the field – including which questions are deemed worth answering, and which answers will result in grants, awards, and tenure – are inordinately shaped by the corporate turn to resource-intensive AI, and the tech-industry incentives propelling it,” Whittaker wrote.

An academic study published last year noted the “near impossibility” for AI researchers to do “critical work without Big Tech granting access to systems that they protect as trade secrets”.

“This means that academics wishing to do good must expose themselves to conflicts of interests.”

It found that more than half of all papers published about ethical considerations of artificial intelligence had at least one author who received money from big tech.

Industry partnerships like those with Google may be especially enticing for Australian universities which have struggled to hang onto staff while international borders have been closed.