NVIDIA also seems like a risky bet given all the money they're passing around in circles to themselves via multi-billion dollar "investments"

From the technical/talent/funding side, I agree with you. With Alphabet, the real risk is that they lose interest/focus and kill (or pivot) products early. I don't really see that happening in the short term (considering the hype/investments/cash around AI) but maybe in the medium to long term if things start to get stale.

Even with that risk though, I agree with you.

I'm less worried about them genuinely losing interest then Google outlasting their AI competition and then kneecapping their AI product to protect their cash cow.

Investors got great returns as Google churned messaging platforms, and this will likely be the case ad Google churns through AI products, or even entire architectures.

I disagree. They're an advertising/attention company.

The jury's still out on whether their AI offerings will compliment their existing business or will cannibalize it. And in the case that it cannibalizes the advertising business, will they undermine/kneecap it to protect that cash cow?

It's been a while since they've been the "don't be evil" and "organizing the world's information"-mission Google.

Revenue attributable to advertising:

Q1: 74.1%

Q2: 74.0%

Q3: 72.5%

Alphabet also has massive market share with YouTube, solid cloud offerings, Waymo which already has driverless/unsupervised robot taxis and their old standby search which is morphing more into more AI answers when you throw questions in your browser.

Alphabet's P/E ratio is lower than the S&P 500's. Some may argue the S&P is mostly being held up by Tech and AI related companies so stock in Alphabet could be seen as undervalued and NVDIA as overvalued.

Hardware almost always ends up getting commoditized so investing in hardware companies for the long haul does carry maybe more risk than mainly software companies.

It’s everyone’s wet dream that Apple buys Anthropic, but I’m guessing their valuation now is already too high even for Apple. And why would Amazon let that happen?

It’s a solid match but not happening unless the AI market craters and Apple swoops in to buy them for vastly less.

Google too. Google owns 14%.

They might say, have fun making single digit or negative profit margins on AI, we’ll sell subscriptions and iPhones and extended warranties.

It makes no sense for Apple to waste money on having their own LLM when they are becoming commoditized - just chose the one that will give them the best deal.

But there is much more to a phone than “just doing stuff agentically”. Either way, you give way too much credit for Google to ever make a good end user product and be able to sell it. Google’s sells of pixels for a year are about the same number Apple sells in three weeks.

Apple’s hardware/ecosystem has been a most for 50 years.

Also Google is non existent in the country that has 1/5 of the worlds population.

Google replaced 'Google play the news' from playing news clips from sources I chose and trust, to an AI generated news feed that I have zero faith isn't hallucinated and from sources I have no idea about. Another multiple times daily function I used my phone for, broken by 'Google AI' because 'I should be happy with whatever they give me, it's a free product'.

Google's Youtube/Music algorithm punishes me if I flag AI slop in my feeds by removing those genres/topics, trying to force AI slop into my feed. This one I actually (well until it runs out the end of the month because I canceled) pay for.

Google has trained their users not to use Pixel's voice/AI capabilities, and to resent them (in the typical Google way, be damned with the old it's been replaced with our new half baked product that will itself be replaced shortly after the bugs are gone and it starts to work kind of OK (still really bad, but Google justifies bad is OK because it's 'FREE').

No one is integrating anything new from Google into their routine. No one is integrating Google's broken AI stuff into their daily routine, because it's friggen BROKEN. Google just one day removed me from setting voice timers with my phone, a core use case, for a year, because they could. My routine is not going back to using Google for things I count on just working because Google will arbitrarily break it and I will get the impact (maybe a burnt dinner, maybe faulty news reporting that causes me a heart attack, maybe who knows, maybe a missed important appointment tomorrow?).

Google doesn't care that I'm hit because 'it's good enough for a free product' to them. Everyone I know with a Pixel hates the ecosystem right now. Removing sideloading might fix that and improve good will I guess though? God Google doesn't know and hates their users/advocates/supporters. Google has moved themselves from 'a good solution' to 'good enough for a cheap device and free tools', and made damn sure I know it (via burnt dinners, having to move to my podcast app for (less current) news, by degrading my music/youtube feeds).

Google is a zombie company, they are dead, they just don't know it yet. Coming soon... Alphabet, a Bending Spoons company.

Google isn’t the next IBM. It’s the next Microsoft - boring, extremely profitable because of inertia. But crappy end user products.

Beyond that there are a lot of new chip companies attacking the market: https://news.ycombinator.com/item?id=45686790

Apple on the other hand... (though they're behind in other regards)

I don't see a natural monopoly anymore.

I remember when SCO had an all hands meeting that they evaluated that linux wasn't a threat because SCO was the safe choice, the big player in UNIX on commodity hardware.

I don't think tech works that way.

Google can kick ass in AI all day, but soon Gemini is going to be saying shit like, "it sounds like your air conditioner is broken, maybe you should call Clearwater HVAC - they're the best!"

Once Google has to start making money from AI, talking to Gemini is going to feel like talking to that friend that invited you to dinner only to try to pitch you on an MLM.

Wouldn't one possible solution be just adding a sidebar with ads for products/services relevant to the current topic? They don't need to change the model output to have ads. (Not advocating for ads, just pointing out there's lots of ways to deliver ads)

1) any time a model is improved, the improvements are not spectacular (anymore), and it takes less than 9 months for the performance to be reproduced by a <1% sized model. Those 9 months are down from 2 years btw.

2) the big target for ads is becoming phones, and specifically tiktok advertisements, to the point that lots of people don't even use computers anymore for online purchases?

That is the nightmare scenario. The puzzle for me is why you apparently think it just a trap for Google. All of the pure AI companies are burning cash. That is going to stop. Either they go broke, or they do something with ads.

There is a third option I guess, and that is they create something that is useful enough to be worth paying for. It won't be just an LLM, but as far as I can tell they are all just fine tuning LLM's. We already know what the limits of an LLM are, as we are already there.

All except Google that is, who are building AI's for all sorts of things, such as protein folding, weather prediction and driving cars. LLM's were their invention, created by them for doing translation and OCR. And unlike everyone else, they aren't dependent on NVidia as they use their own internally developed hardware. Surely there is no argument about Google being the world's power house of AI?? Most of these efforts will be experiments Google is infamous for abandoning. But it's seems likely one or two will become the youtubes of AI.

I can't see anything remotely comparable from the other AI companies. It's difficult to see how this doesn't end with Google completely dominating the space, and all these LLM companies going broke.

I ask, because earlier this year I had the chance to use a Waymo for the first time. I moved a good chunk of my portfolio to GOOG after that.

To me, Waymo felt like either Magic or stepping 15+ years into the future; Demolition Man stuff (im a child of the 80s, Xenial).

Stuff like Waymo, AlphaFold and similar are just so far away from anybody else, that Alphabet could split in several companies and all of them would be hugely dominant in the future. And none of them base their revenue in advertising.

They've already successfully monetised their chatbot (Gemini)[1] while all the others are still wondering how to get there.

-------------------

[1] I've got about 15 - 20 additions to the settings to prefix all chats with "don't show me video links", but apparently the "show youtube link" is at the system layer and cannot be overridden at all.

But, all that aside, you know what they're really good at? Google Cloud. I'm a user of all the major Cloud providers and nothing beats GCP's interface. Azure? Complicated, buggy and unreliable. There's some exploit every quarter. AWS? Overly complex security policies even to deploy a basic app, very enterprise focused and startup-unfriendly. GCP - you can be up and running on a serverless/VM instance in your lunch break. Simple, reliable, scales effortlessly. We serve 10M+ visitors on there and we've had zero issues in the last half a decade with them.

They suck at a lot of other things and they have a lot of other problems. But boy, are they good at Cloud. No wonder even Apple is their customer. It's one of the few products from Google where you can say "it just works".

"Normal" is what most of us want.

https://trends.google.com/trends/explore?date=all&geo=US&q=s...

(CGI is a webserver starting a binary in response to a web request, essentially piping the request into stdin and sending stdout back to the client, in some ways it's brilliantly simple and very unix-y)

But if you are a consultant, why pray tell are you spending that much time in the console except for occasional monitoring? Everything is either CLI commands or infrastructure as code.

And the issue with Google in particular is their customer support and business enterprise go to market sucks. The sales guys at ProServe use to run circles around GCP and never really took them seriously or had talking points. For big contracts we mostly had to compete with Azure because big boring enterprise was already using Microsoft.

When we did have to compete against GCP - and their sales team didn’t blow up the deal themselves - we just had to say “do you really want to trust Google with your workloads? Look at their history of abandoning products and raising prices”

Apple is a customer of all of the big cloud providers and was on stage at last year’s reinvent.

AWS throws money and people at startups. I’ve been on three sides - working at a 60 person startup who hosted on AWS, working at ProServe and now a third party consulting company where many deals come about because of AWS funding.

Tangentially, it's sad to see AI become yet another attention factory. Sora 2 is OAI trying to get the jump on this, but I think it's quite likely that they'll get clobbered by Google and Meta when those companies start juicing their users attention in the same way - they have the ad buyers and the infrastructure for that business already, it's literally how they've made money this whole time.

Unless there are antitrust concerns, but that's hard to see because Google is competition and Anthropic will probably remain the third more niche player.

This definitely doesn't look like it's going to be a winner takes all market.

OpenAI doesn't release MAUs, but it's possible Gemini could surpass OpenAI in MAUs (but really unlikely DAUs) by the end of 2026.

I think the winner will be between xai or meta, im leaning more with xai since elon seems to always have 100% conviction even with seemingly bad ideas and he is way more technical than sam & zuck

Wasn't the "fuzzy search" that ignored keywords run by some sort of LLM? I.e. "lady gaga age" would return documents with "lady gaga old" etc.

That was embeddings AFAIK, so yeah, similar technology to LLMs.

The biggest risk for Google is that it is already a behemoth and it has lost a lot of what made it so special. I also think they have a huge conflict of interest when it comes to AI, because it is a threat to their core business.

I can’t understand how they’re bleeding talent.

Your mention of "VC funding" may be a placeholder for conversational purposes but just to clarify, OpenAI is way beyond the small pocketbooks of typical Venture Capitalists. They have investments from huge sovereign wealth funds (e.g. billions from Middle East oil funds) and trillion-dollar corporations like NVIDIA, Microsoft, AMD, etc.

In other words, OpenAI has embedded itself into the money and tech ecosystem much more deeply than the dotcom failed startup Webvan burning through the limited cash of Sequoia VC.

There are lots of heavily funded vested interests that don't want to see Google be the ultimate winner (or only winner).

Sarcasm, of course, for those who didn’t catch it - it’s hard to make jokes online.

Google has so much cash from other services…

IMHO I think Microsoft is a lot closer in terms of creating a real business around AI because they understand Enterprise customers. In fact they were first to offer private OpenAI deployments with AuthN/AuthZ that you could drop in your own VPC and the ability to handle sensitive data while everyone else was handing out API keys off a public endpoint like a startup. Don't get me wrong Google has had some okay technology (i.e. Gemini 2.5 is middle of the pack) but they seem like a very consumer-oriented company and don't seem to know how to market them.

Google loses on all of those fronts.

I agree with many of your statements, but this one simply isn't true. They've really struggled to integrate AI into products in a useful way. Do you remember glue on pizza? Founding Fathers reimagined for DEI? The Brain/DeepMind merger was largely an acknowledgement of their many misses from a product perspective.

Youtube (Google) currently degrades my feed because when I block AI videos, they assume I dislike the related topic. They have made it either I love AI videos/music, or they punish me.

You are right, they have stakeholders causing inertia to protect their fiefdoms across a large range of products. You are right, they have (profitable) current products which will prove to be barriers to nimble, future, nearterm non-profitable products. I'm not sure that's a strength seeing how they have responded so far.

They are too big and too slow to adapt. They have too many people with interests in protecting their (legacy) niche, too much inertia to overcome. The classic signs of a zombie company. Going purely off their ability to adapt in the last year, they are dead and don't even know it yet.

https://www.sec.gov/Archives/edgar/data/1652044/000165204425...

"Nature of Operations

Google was incorporated in California in September 1998 and re-incorporated in the State of Delaware in August 2003. In 2015, we implemented a holding company reorganization, and as a result, Alphabet Inc. ("Alphabet") became the successor issuer to Google.

We generate revenues by delivering relevant, cost-effective online advertising; cloud-based solutions that provide enterprise customers of all sizes with infrastructure, platform services, and applications; sales of other products and services, such as fees received for subscription-based products, apps and in-app purchases, and devices."

Would "(profitable) information index" be included in (a) "online advertising" (b) "cloud-based solutions" or (c) "sales of other products and services"

But Alphabet SEC filing discloses its revenue-generating operations are (a) online advertising delivery, (b) cloud-based solutions and (c) sales of other products and services

US law requires the statements in Alphabet's disclosure to be accurate, not misleading

Nothing requires statements in HN comments to be accurate, not misleading

What is "(profitable) information index"

Is it part of (a) online advertising delivery, b) cloud-based solutions or (c) sales of other products and services