Every weekend (almost) I share five articles/essays/reports with you. I select these over the course of the week because they are either insightful, informative, interesting, important, or a combination of the above.

Request: Please hit the like button at the top or bottom of the page. The more likes these entries get, the more attractive it is to new readers. This place continues to grow, and I would like to maintain the momentum. Just click the button at the top like this:

Share

It’s become passé to complain about Google’s search engine these days, because it’s been horrible for years. We all recall its early era when its minimalist presentation effectively destroyed its competition overnight. Only us olds remember AltaVista’s search engine, for example. So ubiquitous is its core function that the word “google” entered our lexicon.

Roughly 85-90% of the readers who have subscribed to this Substack have used a gmail address to do so. It’s a great product, although it could be better. Like many of you, I have several gmail addresses, and use email services from other providers like Protonmail. Gmail is incredibly easy to use, and works very well on all the devices that we operate on a daily basis.

Google is a tech behemoth, and is in a monopolistic position when it comes to both of these services. It has used this position to hoover up an insane amount of cash, taking a battering ram to many other businesses in the process, especially news media outlets that rely on advertising revenue. Yet it has not scored any big victories since its rollout of gmail all those years ago.

says that it hasn’t had to for some time….until now. The explosion of AI tech means that its core business is now at threat of extinction unless it can win the AI arms race. Its first foray into this war via its rollout of Gemini has been an absolute disaster. Mike Solana chalks it up to many factors, primarily the “culture of fear” that seems to permeate the tech giant.

The summary:

Last week, following Google’s Gemini disaster, it quickly became clear the $1.7 trillion-dollar giant had bigger problems than its hotly anticipated generative AI tool erasing white people from human history. Separate from the mortifying clownishness of this specific and egregious breach of public trust, Gemini was obviously — at its absolute best — still grossly inferior to its largest competitors. This failure signaled, for the first time in Google’s life, real vulnerability to its core business, and terrified investors fled, shaving over $70 billion off the kraken’s market cap. Now, the industry is left with a startling question: how is it even possible for an initiative so important, at a company so dominant, to fail so completely?

The product rollout was so incredibly botched that mainstream media outlets friendly to Google (and its cash) are doing damage control on its behalf.

Multiple issues:

This is Google, an invincible search monopoly printing $80 billion a year in net income, sitting on something like $120 billion in cash, employing over 150,000 people, with close to 30,000 engineers. Could the story really be so simple as out-of-control DEI-brained management? To a certain extent, and on a few teams far more than most, this does appear to be true. But on closer examination it seems woke lunacy is only a symptom of the company’s far greater problems. First, Google is now facing the classic Innovator’s Dilemma, in which the development of a new and important technology well within its capability undermines its present business model. Second, and probably more importantly, nobody’s in charge.

It’s human nature to want to boil issues down to one single cause of factor, when it’s usually several all at once. We humans also have a strong tendency to zoom in on one factor when presented with many, mainly because the one that we focus on is something that we know and/or are passionate about.

The “culture of fear”:

Over the last week, in communication with a flood of Googlers eager to speak on the issues facing their company — from management on almost every major product, to engineering, sales, trust and safety, publicity, and marketing — employees painted a far bleaker portrait of the company than is often reported: Google is a runaway, cash-printing search monopoly with no vision, no leadership, and, due to its incredibly siloed culture, no real sense of what is going on from team to team. The only thing connecting employees is a powerful, sprawling HR bureaucracy that, yes, is totally obsessed with left-wing political dogma. But the company’s zealots are only capable of thriving because no other fount of power asserts, or even attempts to assert, any kind of meaningful influence. The phrase “culture of fear” was used by almost everyone I spoke with, and not only to explain the dearth of resistance to the company’s craziest DEI excesses, but to explain the dearth of innovation from what might be the highest concentration of talented technologists in the world. Employees, at every level, and for almost every reason, are afraid to challenge the many processes which have crippled the company — and outside of promotion season, most are afraid to be noticed. In the words of one senior engineer, “I think it’s impossible to ship good products at Google.” Now, with the company’s core product threatened by a new technology release they just botched on a global stage, that failure to innovate places the company’s existence at risk.

Some specifics about the Gemini rollout catastrophe:

First, according to people close to the project, the team responsible for Gemini was not only warned about its “overdiversification” problem before launch (the technical term for erasing white people from human history), but understood the nebulous DEI architecture — separate from causing offense — dramatically eroded the quality of even its most benign search results.

Roughly, the “safety” architecture designed around image generation (slightly different than text) looks like this: a user makes a request for an image in the chat interface, which Gemini — once it realizes it’s being asked for a picture — sends on to a smaller LLM that exists specifically for rewriting prompts in keeping with the company’s thorough “diversity” mandates. This smaller LLM is trained with LoRA on synthetic data generated by another (third) LLM that uses Google’s full, pages-long diversity “preamble.” The second LLM then rephrases the question (say, “show me an auto mechanic” becomes “show me an Asian auto mechanic in overalls laughing, an African American female auto mechanic holding a wrench, a Native American auto mechanic with a hard hat” etc.), and sends it on to the diffusion model. The diffusion model checks to make sure the prompts don’t violate standard safety policy (things like self-harm, anything with children, images of real people), generates the images, checks the images again for violations of safety policy, and returns them to the user.

“Three entire models all kind of designed for adding diversity,” I asked one person close to the safety architecture. “It seems like that — diversity — is a huge, maybe even central part of the product. Like, in a way it is the product?”

“Yes,” he said, “we spend probably half of our engineering hours on this.”

Diversity as the “central part of the product”, with half of the engineering hours spent on it. This can be viewed in many different ways, but to me it seems like a huge waste of productivity and drain on resources in order to benefit ideology.

Solana then zooms out and reports that most people employed at Google are indeed happy to be there, but that the culture has grown “soft” and isn’t in shape to fight the AI arms race. He lays the blame squarely at the feet of current CEO Sundar Pichai, criticizing him for a “lack of vision”, among other things. One of those other things include how Google is “siloed off”, making cross-unit collaboration both difficult and cumbersome:

Among higher performers I spoke with, a desire to fire more people was both surprising after a year of massive layoffs, and universal. “You could cut the headcount by 50%,” one engineer said, “and nothing would change.” At Google, it’s exceedingly difficult to get rid of underperformers, taking something like a year, and that’s only if, at the final moment, a low performer doesn’t take advantage of the company’s famously liberal (and chronically abused) medical leave policy with a bullshit claim. This, along with an onslaught of work from HR that has nothing to do with actual work, layers tremendous friction into the daily task of producing anything of value. But then, speaking of the “People” people —

One of the more fascinating things I learned about Google was the unique degree to which it’s siloed off, which has dramatically increased the influence of HR, one of the only teams connecting the entire company. And that team? Baseline far crazier than any other team.

As we all know, HR Departments are the Political Commissars of the Corporate West.

Stupid stuff:

Before the pernicious or the insidious, we of course begin with the deeply, hilariously stupid: from screenshots I’ve obtained, an insistence engineers no longer use phrases like “build ninja” (cultural appropriation), “nuke the old cache” (military metaphor), “sanity check” (disparages mental illness), or “dummy variable” (disparages disabilities). One engineer was “strongly encouraged” to use one of 15 different crazed pronoun combinations on his corporate bio (including “zie/hir,” “ey/em,” “xe/xem,” and “ve/vir”), which he did against his wishes for fear of retribution. Per a January 9 email, the Greyglers, an affinity group for people over 40, is changing its name because not all people over 40 have gray hair, thus constituting lack of “inclusivity” (Google has hired an external consultant to rename the group). There’s no shortage of DEI groups, of course, or affinity groups, including any number of working groups populated by radical political zealots with whom product managers are meant to consult on new tools and products.

Solana also reports overt discrimination against White males in hiring/promotions. He also argues that Google will not learn its lesson from the Gemini debacle, and will repeat it again in the near future. His prognosis for the giant:

Google is sitting on an enormous amount of cash, but if the company does lose AI, and AI in turn eats search, it will lose its core function, and become obsolete. Talent will leave, and Google will be reduced to a giant, slowly shrinking pile of cash. A new kind of bank, maybe, run by a dogmatic class of extremist HR priestesses? That’s interesting, I guess. But it’s not a technology company.

Its wild success and monopolistic position has made it grow fat, lazy, and worst of all, stupid.

Leave a comment

DEI in the business world came about because corporations didn’t want to expose themselves to legal liabilities stemming from charges of workplace discrimination. To reduce the exposure to such charges, HR was tasked with promoting internal cultures of diversity. This resulted in HR departments carving out their own empires, to the horror of many employees.

It now seems that an overreach took place, and thanks to the SCOTUS ruling that ended Affirmative Action, Corporate America is now “tweaking” its DEI initiatives due to fears of lawsuits going the other way i.e. “reverse discrimination”. Bloomberg reports that Wall Street’s DEI retreat has officially begun:

From C-suites down, American finance is quietly reassessing its promises to level the playing field. The growing conservative assault on DEI, coupled with pockets of resentment among White employees, have executives moving to head off accusations of reverse discrimination. It’s not just Wall Street. In recent weeks, Zoom Video Communications Inc. cut its internal DEI team amid broader layoffs and Tesla Inc. removed language about minority workers from a regulatory filing.

The seemingly small changes — lawyerly tweaks, executives call them — are starting to add up to something big: the end of a watershed era for diversity in the US workplace, and the start of a new, uncertain one.

“We’re past the peak,” said Subha Barry, former head of diversity at Merrill Lynch.

The impact of people like Elon Musk and Bill Ackman:

Publicly, executives insist they’re as dedicated as ever. Goldman Sachs and other major US banks say they remain committed to attracting and promoting people from a range of backgrounds. Privately, however, many acknowledge that the high-profile campaign against DEI— amplified by billionaires including Elon Musk and Bill Ackman — threatens to set back what progress Wall Street has made.

Recruitment programs aimed at women and minorities — a key tool for recruiting diverse talent — are being reworked. In-house affinity groups, specific workforce targets and even boardroom diversity initiatives are all up for review, executives, consultants and lawyers say.

It’s a remarkable turn. Less than four years ago, amid lofty talk of a “racial reckoning” and an “inflection point,” America’s CEOs were vowing to embrace inclusive hiring, promote minorities and narrow the gender pay gap.

Fear of litigation:

Bankers and lawyers contend they have little choice but to reframe or pause new diversity initiatives and to get ahead of the blowback and potential litigation.

“People are all over the place,” said Valerie Irick Rainford, who oversaw programs to promote Black leaders at JPMorgan Chase before leaving the bank in 2019.

Colour-Blind Goldman Sachs:

At Goldman Sachs, lawyers have advised senior executives to remove references to race and gender in college recruitment programs, according to people familiar with the matter. They’ve also warned against hosting exclusive events for specific groups, such as women and people of color.

Corporate Diversity Consultants are worried:

One influential Wall Street banker said he’s observed that the sway executives in charge of diversity recruitment used to have with decision makers has diminished. Asking for anonymity to describe the recent changes, he said that colleagues who’d been willing in recent years to be open to diverse recruitment are reverting back to the way they were before George Floyd’s murder.

Rainford, who consults on diversity for companies including financial firms, said one client told her recently that it was wondering whether it needs to pause its diversity programs altogether. “If you didn’t have the conviction in the first place, it’s easy to say, ‘We’re not doing that anymore,’” she said. For now, her client is sticking with its diversity programs, she added.

A reaction:

Meantime, Stephen Miller, the architect of anti-immigration policies under former President Donald Trump, has emerged as a key figure in preparing a hardline conservative agenda in the event Trump returns to the White House.

Miller is bent on eradicating diversity initiatives in business. His advocacy group, America First Legal, has accused dozens of companies of discriminating against White men.

It’s not just conservative activists, either. Pushback is coming from within:

Still, conservative activists and politicians aren’t the only ones challenging DEI. So are some Wall Street workers, albeit far more quietly.

The pushback inside the industry is real, according to Barry, the former Merrill executive, who now leads DEI advisory firm Seramount. She’s had White women ask her what opportunities their sons will have if Wall Street focuses solely on promoting underrepresented groups.

“Are they doing it publicly? Vocally? Of course not,” Barry said. “But they’re doing it. And when they do it, you have to listen.”

The moms are speaking up for their sons