Airbnb sees AI as its ticket to become a sprawling Big Tech giant

Reckons OpenAI and Google are mere infrastructure players who don't understand apps or how AI will change them

Airbnb sees AI as its ticket out of the travel industry ghetto, and a passport to expanding its services into other industries.

CFO David Stephenson outlined that planned journey on Tuesday during the short-stay rental pioneer's Q4 2023 earnings call.

Asked about AI, he told investors "Airbnb is not an infrastructure company. Infrastructure would be a large language model or obviously, GPUs. So we're not going to be investing in infrastructure."

Fair enough. Solid businesses know to stick to their core competencies, and Airbnb is clearly not built to become a chipmaker. But it is very much in the business of building apps that delight users – and Stephenson suggested that's where AI will make a difference.

"We can excel … on the application layer," the CFO opined, "And I believe that we can build one of the leading and most innovative AI interfaces ever created."

Doing so starts with recognition that AI-powered apps need to evolve beyond current interface conventions.

"Maybe one way to make this real is – if you were to open, say, ChatGPT or Google, though the models are very powerful, the interface is really not an AI interface," he argued. "It's the same interface as the 2000s or 2010s – it's a typical classical web interface. So we feel like the models in a sense, are probably underutilized."

Airbnb's interface is also old-school, he admitted. "We have a platform that was built for one vertical: short-term space." But he thinks generative AI could create interfaces that "provide experience that's so much more personalized than anything you've ever seen before.

"Imagine an app that you feel like knows you," he suggested. "It's like the ultimate concierge – an interface that is adaptive and evolving and changing in real time, unlike no interface you've ever seen before."

The CFO said Airbnb is already working on AI interfaces, and teased "some very big announcements later this year" – but wouldn't elaborate on how they'll be used.

He insisted that AI will help Airbnb "go from a single vertical company to a cross-vertical company."

The CFO made that point because Airbnb management has noticed that the biggest tech players succeed in more than one market.

"We studied Amazon in the late '90s, early 2000s when they went from books to everything, or Apple when they launched the App Store," he recounted. "These really large technology companies are horizontal platforms.

"And I think with AI and the work we're doing around AI interfaces, I think that's what you should expect us."

CEO Brian Chesky told investors Airbnb's AI efforts will be "a multi-year journey." He pointed to the November 2023 acquisition of GamePlanner.AI – a stealth AI startup led by Adam Cheyer, who developed Siri for Apple – as a key contributor to Airbnb's AI plan.

Hey Brian, did you know Siri was kind of a dud?

Airbnb earned $2.2 billion of revenue in Q4, from 99 million bookings for "nights and experiences." The revenue figure was up 17 percent year over year and the bookings rose 12 points – but that growth could not prevent a $349 million net loss. The full year also produced a net loss, of $4.8 billion on revenue of $9.9 billion earned from 448.2 million bookings.

The number of hosts signed up to rent their properties through the service topped five million in Q4, a period during which 55 percent of gross night bookings were made on the Airbnb app – up 50 percent from a year ago.

That figure is soon, presumably, to rise even higher and into more markets once Airbnb nails its AI concierge and goes horizontal – a process execs repeatedly described as "perfecting our first service and expanding beyond the core." ®

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