news：Google cancels contract with AI data firm that trained Bard

news：Google cancels contract with AI data firm that trained Bard is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Google terminates contract with Appen, impacting its financial situation and over 2,000 subcontracted employees.
• Appen aims to focus on cost management, business turnaround, and delivering high-quality AI data.

Alphabet, Google’s parent company, has terminated its contract with Appen, an Australian-based AI data firm that has helped train the company’s chatbot Bard, as well as other AI products. Alphabet notified Appen over the weekend, stating that the decision was made after a “strategic review process”. The termination will be effective on March 19th, and Appen has stated that it was not aware of Google’s decision beforehand.

Impact on Appen’s employees

According to a statement released by Alphabet Workers Union on Monday, Appen accounts for one-third of Alphabet’s revenue from subcontractors. This means that the decision to terminate the partnership will impact “at least 2,000 subcontracted Alphabet employees”.

Appen’s client portfolio

Appen has helped numerous tech giants, including Microsoft, Apple, Meta, Google, and Amazon, in training their AI models. These five clients previously accounted for 80% of Appen’s revenue. The company has a platform consisting of more than one million freelancers from over 170 countries.

Revenue and financial struggles

According to a document submitted on Monday, Appen’s annual revenue was $273 million in 2023, with revenue from the partnership with Alphabet totaling $82.8 million.

Despite having an enviable client list and a history spanning nearly 30 years, Appen has faced financial struggles in recent years. The company has lost clients, experienced a series of executive departures, and suffered from a significant drop in financial performance. Its revenue declined by 30% in 2023, partly due to “challenges in external operations and macro conditions”.

Difficulties in transitioning to generative AI

Appen’s difficulties in transitioning to generative AI reflect weak quality control and organizational structure, according to a former employee who spoke to CNBC anonymously due to fear of retaliation. Appen has previously worked on evaluating the relevance of search results, helping AI assistants understand requests with different accents, classifying e-commerce images using AI, and building maps of EV charging stations.

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Labor issues

Appen has faced labor issues in the past. In 2019, Google stated that its contractors needed to pay workers a minimum wage of $15 per hour. However, according to some workers who wrote an open letter, Appen did not meet this requirement. After months of organizing, freelancers who worked on Bard chatbot and other Google products at Appen received a raise, but labor issues remain. In June, Appen faced charges from the U.S. National Labor Relations Board for allegedly terminating six freelancers who had expressed dissatisfaction with their working conditions.

In its document submitted on Monday, Appen stated that it would focus on managing costs, turning around its business, and providing high-quality AI data for its clients. The company wrote, “Following the termination notice from Google, Appen will immediately pivot its strategic focus and provide more details in the FY2023 full-year results to be released on 27th February 2024.”