Google LLC has ended its contract with Australian AI data firm Appen, which helped the tech giant train its AI chatbot Bard, Search Engine, and other products.
Contractors at Appen help rate answers and data quality from AI models such as Bard and search engines like Google Search.
Besides Google, Appen has also worked with all four of the other Big Five companies – Meta, Microsoft, Apple, and Amazon to train their AI models.
According to the notification, Google will stop availing of Appen’s services on March 19, 2024. Appen did not have any prior knowledge of Google’s decision to end the contract, the company said in a filing notifying the Australian Stock Exchange on January 20.
Our decision to end the contract was made as part of our ongoing effort to evaluate and adjust many of our supplier partnerships across Alphabet to ensure our vendor operations are as efficient as possible.Courtenay Mencini, Google spokesperson
Remember, Google had previously cited the need for greater efficiency as the reason behind its mass layoffs.
Despite being the backbone of the industry, employees at companies like Appen are often ignored and underpaid. Last year, employees at Appen who are also a part of the Alphabet Workers Union, petitioned Appen to raise the wages from $10 to $15 an hour.
Appen did eventually relent, but the wage increase wasn’t as much as the union demanded. Appen then fired several of these disconcerting workers, blaming it on adverse business conditions.
According to the tech giant’s CEO Sundar Pichai, more employee layoffs are yet to come.
Workers at Accenture, another contractor working with Google, have refused to handle “obscene, graphic, and offensive prompts” for the Bard in November 2023, before the chatbot was released.
The employees then voted overwhelmingly to unionize and join the Alphabet Workers Union.
The impact of the cancellation of the Appen contract on Google’s Search Quality Rater Program, which measures the quality of search results, remains unclear. Google updated its Search Quality Rater Guidelines in November 2023.
The announcement of the contract termination follows a series of layoffs by Google across different departments. The layoffs have drawn a lot of criticism from Google employees, who called out the company’s leadership for lacking initiative and vision.
Appen Stocks Hit All-Time Low Following Google’s Decision to Terminate Contract
This contract termination has impacted Appen’s stocks severely, which reached an all-time low. This shouldn’t be surprising considering the company’s contract with Google makes up for 26% of its revenue.
Appen made $273 million last year, of which $82.8 million came from Google.
Despite Appen’s strong portfolio and the spike in demand for training data for generative AI tools, the company has been struggling in recent years.
Suffering from a loss of customers, declining financials, and the departure of several executives, Appen recorded a 30% revenue loss in 2023.
In its filing with the Australian Stock Exchange, Appen wrote that it will now focus on “cost management, business turnaround, and delivery of high-quality AI data for its customers”.
