The world has not been kind to Google and Sundar Pichai. Everyone thought ChatGPT would kill its search business. It hasn't, and it won't. Here's why.
To set some context, Google's Search biz grew 10% to $50.7B in the latest quarter, surpassing expectations and surprising everyone who wrote obituaries for Search.
Despite being a pioneer in AI for decades and having massive data advantages, it fumbled its lead by not productizing AI as fast as many startups. It was caught off-guard when OpenAI made a huge splash with ChatGPT in late 2022.
Deep pockets may not protect you from disruption, but distribution advantage will buy you time when you need it.
This is particularly true in the AI era because AI isn't creating entirely new distribution channels.
What many are missing is the fact that AI is not as disruptive for incumbents as mobile or the internet was. AI favours the incumbents more than the insurgents.
Quoting what Sequoia Capital's Managing Partner Roelof Botha said in his chat with Mario Gabriele recently:
"For consumer products, the internet and mobile totally presented new distribution channels. And you could see a company that was successful at mobile completely usurp the company that was desktop bound. AI is not quite the same. I have no doubt that you're going to see spectacular companies built in AI because a fast mover who tailors the product to the needs of consumers distinctively may still benefit from the innovator's dilemma shackles that burden incumbents. But nimble incumbents have access to this tool, have an existing distribution footprint, have existing data that they could use to tailor these models to build distinctive services."
Sure enough, Google withstood the onslaught and came out on top. Gemini 2.5 Pro is the best overall model on the market, topping LMArena by a wide margin. Veo 2 is the best video-gen model.
How will this all play out for consumers? Look no further than India, a 95% Android country.
Just yesterday, I used their new Gemini AI Live feature on my phone that rivals ChatGPT's voice mode but is built right into Google's 'defaults' ecosystem. Within Search, there's now a 30-second AI-generated audio summary of IPL matches, which updates live. Just these two examples prove that Google, despite a late start, is best positioned to take AI to the next billion people almost free of cost.
Imagine the countless touchpoints across its apps where we will soon see more such actually delightful AI features.
This is why I believe the "Google is doomed" narrative is painfully shortsighted. Yes, they were slow to respond to ChatGPT. Yes, they've had embarrassing stumbles. But their distribution moat buys them time, provided they continue to stay nimble.
OpenAI needs to convince users to visit ChatGPT instead of Google. Perplexity needs to convince users to download a new app or visit a new website. Google just needs to update the software you're already using a dozen times daily.