Author: Milk Road AI | Date: October 2023
Google is rapidly consolidating its lead in AI through strategic partnerships and product launches. This summary breaks down why their integrated tech stack and data advantage make them nearly unassailable.
The AI race is heating up, but one player seems to be pulling away. Ejaaz, a sharp observer, unpacks Google's recent moves, revealing a strategic masterclass in utilizing an unparalleled tech stack, vast data, and massive distribution to establish dominance.
"Google's playing on easy mode right now and they've gone on the offense much quicker than I expected."
"Apple has decided to go with Google's Gemini models as their primary model supplier... it's costing them $1 billion a year for the privilege."
"Google becomes the intent layer for e-commerce... That shifts the power from the likes of Amazon."
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Anthropic has all your conversations for data. OpenAI also has your conversations as well. Google has all that other data, your location, your search history, and everything. How do you compete with that?
And that's also data that OpenAI Anthropic can never get access to. They have to build it from scratch. So, Google's playing on easy mode right now and they've gone on the offense much quicker than I expected to be honest.
The second big product launch or rather announcement that they made this week was their partnership with Apple. For those of you who haven't heard about it, Apple has decided to go with Google's Gemini models as their primary model supplier.
Apple's not going to be training their own AI model. They're just going to pay Google to license it, costing them $1 billion a year for the privilege of being able to license these models. It's going to power Apple's Siri and their foundational model.
They're going to train it further to make it specific for their Apple users. Now if you wanted to understand how impactful this is going to be for Google and Gemini, there are around 2 to 3 billion Apple devices currently operating.
That's net new distribution for Google for a company that already has massive distribution. Just an insane deal. And I also want to point out that Apple also had partnerships with Anthropic and OpenAI that's now dead in the water.
Specifically, the reason for this is they said that Google their foundation was much more capable. It was the only option for them to pick. Their words not mine.
Does that mean like tech stack and its scalability?
Yes. Which brings me to my next point, which is I don't really think there was any other company that could offer Apple what they wanted. I think it was always going to be Google.
Why? Because they're the only company that has the entire AI stack at scale. They're the only ones that can scale to three billion devices. OpenAI can't do that. They don't have enough compute. They don't have enough infrastructure. They don't have enough employees.
Grock can't get there because it's not there yet. If I were looking at Grock right now, they're suffering from a few different things:
Google Gemini doesn't rely on Nvidia GPUs. They don't have to play in this whole game of can I get capacity from Nvidia and TSMC? Google has their TPUs. They've never touched an NVIDIA GPU to train their model at all.
There's certain reliance that Google can provide for them. And then there's also the decade long history that Apple has with Google. Remember, Google pays Apple 20 billion dollars a year just to be the default search engine for Safari. So, there's some camaraderie going on there.
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The interesting thing about Apple is one, what this partnership does is going to bring Siri to life. It's going to make it smart because honestly Siri has been finally pretty right. It's been the dumbest tool for years.
Finally, Siri's going to have a brain, Google's Gemini. And that is going to make some incredible new use cases. For example, I'm just going to be able to talk to my phone and tell it to order the groceries I want for my cheesecake recipe that I'm going to make tonight.
It'll just go look up the recipe, find the groceries and then just go order it for me. It'll actually be able to execute and think and do more. If I ask Siri to do that now, I don't even know what kind of response it's going to give me, but it's not going to be useful.
I really think this is going to be a huge step forward in the actual capability of people being able to use AI because you don't even really need to download anything. It's just already on your phone. Two or three million devices all of a sudden just get access to Gemini.
And who knows what Apple's going to do with this. I think it's coming in this summer of 2026 as far as I know. I think it's going to be a huge step forward. I'm pretty excited for that.
Do you have any thoughts on what this might actually be other than Siri's going to be smarter?
I can't comment on what exactly it'll look like. I think the general idea that you just gave there, which is it's going to be extremely helpful for anyone that uses an Apple device is bang on.
One thing I will say is everyone likes to kind of dunk on Apple and saying, "Hey, god, like they've reached a point where they have to like rely on Google." I had that view at one point, but I now have a different view now.
You could argue that Apple is actually really smart because they haven't spent tens to hundreds of billions of dollars of capex to train a model and they don't have to manage any of the data center infrastructure. They've just let everyone else fight it out and then they license it for a billion dollars.
Apple has plenty of cash and then they'll take that power, that technology, and do what they do best, which is building the best user experience ecosystem that has ever existed. That's why Apple is Apple.
What I'm really excited about is what they're going to do with the models. I think they'll build some of the best app experiences and AI experiences that actually feel like magic using Google's Gemini model. So, it's a win-win in my opinion.
Anyway, quickly moving on, the third announcement that Google made is they want to take over all e-commerce transactions. So, they launched something called the Universal Commerce Protocol which basically will allow anyone to purchase anything just by asking Gemini in plain English on the Gemini app on the chatbot.
There's been previously promises made by the likes of Open AI through their agent that you could have something that works like this, but it's never really worked. This is something that actually will work because Google has built out the end to end kind of flow for something like this and they've partnered with some really big retailers to start off with Shopify, Walmart and a bunch of others.
What I like about this is if you think about the what this could become a few years in the future. Okay, let's say it actually scales and it's actually useful and my girlfriend spends all her money on Gemini buying a bunch of random crap because it keeps advertising it to her or it's something that she just genuinely wants to buy and it's really good at identifying it.
Google becomes the intense layer for e-commerce. What does that mean? It means it'll know exactly what you want to buy and provide you with the link or the option to buy it. In fact, it'll automate the entire checkout process for you. It'll just add to cart and do it for you. You just have to say yes.
It'll know why you want to buy it. That shifts the power from the likes of Amazon, for example, who currently captures the intents and can and it can track, oh yeah, this is why Kyle's buying this over to Google.
That's incredibly powerful because Amazon now just becomes a warehouse and distribution service and Google becomes the intense layer, which is incredibly valuable. So Google's just going for everything.
To round this out, Josh and I, my co-host, we commented on these three launches, and this was on Tuesday, so it was a crazy week already. I was like, "Oh, this is amazing."
They're going to use all this data and all these product launches to build a personalized version of Gemini. That is going to be the sickest thing ever because we finally go from general LLMs to something that cares about me. I don't care about you cut and what you want. I want an AI that cares about me.
Literally the next day they announced Google Personal Intelligence, which is their fourth product launcher this week, which is exactly that. So, long story short, I am exhausted, but very bullish Google.
Also extremely bullish Google. The speed at which they're doing this, I think when you were on about a month ago, you were like, "Yeah, Google's the one to be looking at. They're going to they're going to own the, you know, they own the AI tech stack already."
They're going to be able to launch the best products, and we're already seeing it coming to fruition. What are we two weeks into to 2026?
How does anyone compete with Google? Can anyone compete at this level right now? Because they are at a level that is just absolutely crazy.
I'm not sure anyone can compete. What do you think? And is this a good thing? Because we sort of chat about this real like before we started clicking record, which is like they are literally going to own it all and they're going to have all of our data. And is this a bad thing? How do you think about what's happening here?
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