Don't think it matters in the long run to be honest. The models have no moat, they are becoming a commodity.
Besides that, Google is in a pretty good position, they're not bleeding money on AI like Anthropic/OpenAI, and they own product verticals where they can integrate it. Plus they have a mature ads-model which is what might actually drive a bit of revenue for LLMs.
I think the 'models have no moat' thing is overblown. Only like 3-4 companies in the entire world have cutting edge models, that means there is some kind of moat...
yeah, sure, look at anthropic revenue, what is it if not the moat? you can argue for how long but for them good model = the fastest growing company ever.
Grabbing market-share if you have investors that are ready to burn cash infinetely. Find a hot niche, buy a banana 1 USD, sell it for 0.10 USD.
Example: Cursor, they became popular because they were selling ChatGPT unlimited for 20 USD / month.
When they launched, just a reskinned VS Code, "fastest growing AI company"
No coincidence they were bought by SpaceX, who wants to consolidate revenue even if non-sense as long it helps other investors to exit. It shows rapid growth.
Profit is the real moat.
One example: Nvidia. Proprietary tooling, proprietary IP, proprietary hardware, no alternative, expensive.
You don't know what Cursor's game plan was. Maybe acquisition was their plan.
Buying at $1 and selling for $0.1 is still viable as long as they have money in the bank, until they achieve their goals. Most startups start out that way. Even giving away their services for free.
Obviously there will be failures. Doesn't mean they have no moat. Can you say a business with 100 customers and $1000 debt is less viable than one with a single customer and no debt?
I feel like the models have no moat paradigm died when a single model expanded past the memory of single GPU slices. The moat is hosting the model. Even paying a server host to run a rack of GPUs has immense upstart cost, and then you're still struggling to compete on the add-ons of the things on top of the model (prompts, validation loops, etc). You can only throw so much money at a problem.
And Google has all of those. Custom silicon, more data than anyone else and probably the most comprehensive data collection system, and phones in the hands of 73% of the global smartphone using population to push gemini into to get high volume usage feedback and even more telemetry and data.
I don't think you're honestly accounting for the engineering behind the progress models are making. If it was just a matter of compute on hand and iterating, Meta would be neck and neck with Ant, OAI, and Google, but clearly you've gotta have more.
Noam has a deep expertise in these systems at every level, both algorithmically and at production scale, and knows how to leverage things at different levels.
It's not like Google won't have anyone else that can do what he does, but at the same time, it's an implicit criticism of Google's culture, operations, development, and overall AI program. Shazeer is well past the point where the paycheck is the deciding factor, although I'm certain he is very well paid. Having the freedom to innovate and build free from the corporate fuckery of Google and Facebook is probably more valuable than the pay raise he got with the move, and OAI has the advantage of not having to cope with decades of corporate cruft and inertia. They'll get there - all corporations do - but they're relatively young enough to still be nimble.
I honestly don't think that matters for multiple reasons:
1. There are already multiple "sota" models on the market that compete with only marginal gains between them (OpenAI, Anthropic, Google/Gemini) and some that are catching up (DeepSeek, Qwen,..).
2. The fact that something is a hard engineering problem does not mean it's generating revenue. So while what you said is true, deep expertise is required to push the industry forward, I don't think that is going to matter for the bottom line of these companies. Hence why I think the models don't give a company any 'moat' in a capitalist economy.
Besides that, Google is in a pretty good position, they're not bleeding money on AI like Anthropic/OpenAI, and they own product verticals where they can integrate it. Plus they have a mature ads-model which is what might actually drive a bit of revenue for LLMs.