[reenorap]

How is Anthropic, OpenAI and xAi going to compete against the likes of Google that can spend $200 billion a year? It’s an impossible war and all these investors are throwing their money into a bottomless insatiable pit of money.

Until the funding stops for one reason or another and then everyone loses all their money at once like a star that collapses into a black hole singularity in a femtosecond.

[twobitshifter]

As someone who thought Google+ doomed facebook, because of Gmail accounts and everyone with Google as their homepage already, I learned not to overestimate Google’s abilities.

[AbstractH24]

That is a great counter example I never considered

[Debeli]

Right! There's maybe a bit of subconscious act of rebellion from users who are actually against monopoly added to it :)

[pragmatic]

How in the world would you have thought that? Genuinely curious.

It was obviously DOA and waaaayyy outside G'scompetence.

[mrtksn]

Theoretically Apple can spend just as much. What are the outcomes though? All those giants have their own business that are established and profitable.

It’s the new kids in the block that will make the difference.

You know those lists on twitter about how many companies US has in top 10 and are presented as a win? Those are actually lists of capital concentrations blocking innovation. It looks like US is winning but for some reason life is better in EU and innovation is faster in China.

It’s companies like OpenAI Anthropic that will move US ahead. Even if some core innovation or and capital comes from the establishment.

[c7b]

> Theoretically Apple can spend just as much. What are the outcomes though?

The GP was talking about Google specifically, and their outcomes on AI are nothing to scoff at. They had a rocky late start, but they seem to have gotten over that. Their models are now very much competitive with the startups. And it's not just that have more money to spend. They probably have more training data than anyone in the world, and they also have more infrastructure, more manpower, more of a global footprint than the startups.

The Innovator's Dilemma is an anecdotal, maybe a statistical relationship at best, but not a fundamental law of nature. When an established company has everything it should take to become a leader in a new industry in theory, and in practice their products are already on par with the industry leaders, you know at some point it becomes rational to think that maybe they might become a leader.

[sousousou]

Sometimes I worry about the incentives for innovation in the US.

Step 1, find something to innovate on, sell the promise of it to investors. Step 2, build a prototype or worst case, build it for real and start generating income from your truly innovate and unique product. Step 3, get acquired by a large company and then shut down because your product competed with theirs.

End result, general public possibly benefited from your innovation, but in the long run, it was temporary.

Maybe the incentives would be better if it were harder for large companies to acquire small ones? If the path to riches where driven primarily by delivering value to customers. Would love to hear other's opinions on this.

[a4isms]

> Theoretically Apple can spend just as much. What are the outcomes though? All those giants have their own business that are established and profitable.

Ah! Well, if we put aside "The Innovator's Dilemma" and pick up Reis and Trout's "marketing Warfare," we get the answer. Apple does have an existing business, but investing in AI does not cannibalize it. They can throw money at it, try to find a way to make it work really, really well for consumers on very specific custom hardware in their devices...

Likewise, someone like Google has all the money in the world to throw at it, but they aren't investing in a new market, they're defending their search business against everyone just asking a generative AI Chatbot questions. I\But it's possible for them to screw this up internally over turf wards, just ask the engineers who tried to make search better but were kneecapped by Prabhakar Raghavan who demanded that search be poor enough to drive people to click sponsored results.

In the "Marketing Warfare" model, Apple is attempting a flanking attack: An outsider trying to disrupt the AI giants with an approach that they can't imitate without undermining their value proposition. On-device AI flanks the big giants that areservcie-centric.

And in that model, Google is playing defence, which is what every leader is supposed to do. Their job is to "cover every move," which they are doing in textbook fashion. If AI goes away, Google dry their tears and continue to mine ad revenue.

[SoftTalker]

> What are the outcomes though?

NVIDIA, and contractors who build data centers, and manufacturers who supply them, will all get rich.

[asdff]

Kind of funny you say it is capital concentration that blocks innovation then praise anthropic, when we are in a thread about them concentrating capital. And not only have these companies concentrated capital, and mindshare in the mass media, they have concentrated talent.

You have to wonder how often they hire talent just to keep them out of the market for other upstart companies to potentially use, like with no actual objective just to keep them off market. With half trillion valuation there's plenty of money for that, and given how few people actually know the really deep stuff competently, it would be so stupid of them not to be doing that right now.

[pazimzadeh]

The new kids have an easier time focusing. the big kids can integrate AI with their existing products and user data

In the long term, big kids win no? The big kids are also going to have an easier time with hardware at scale too

[SamvitJ]

"but for some reason life is better in EU" citation needed

[timmmmmmay]

Google fucks up 90% of their products, why do you think Gemini is in the 10%?

[davnicwil]

well, it's basically existential, so the incentive is there to not only get it very right but also to limit the delta with how right anyone else gets it. The same can't really be said of the long tail of products Google have done.

Look to GCP as an example. It had to be done, with similar competitive dynamics, it was done very well.

Look to Android as another.

[xmprt]

Because Google has the money to build 10 different versions/iterations of Gemini and can essentially force one to work. They have most people's data and most people use them for mail/search/browser/maps as well.

In my opinion though this is a race to the bottom rather than a winner takes all situation so I don't think anyone is coming out ahead once the dust settles.

[infecto]

Agree. Look at how miserably MSFT has failed at integrating AI tastefully in their business.

Google makes money selling ads. Nothing else matters.

[H8crilA]

Google has barely released a successful product in 20 years.

[root_axis]

Because the product quality doesn't matter if the competition isn't making any money.

[port11]

0% interest to defend Big Don’t Be Evil, but success rates for most businesses, new or existing, are low. Succeeding at 10% of their ventures isn’t that bad, considering they add up to the trillions of dollars of valuation for big G.

[XorNot]

Persistence. Google has a lot more endurance then OpenAI does in this game.

The current AI market is going to destroy anyone who's specialized into it compared to having alternative revenue streams to subsidize it.

[dlahoda]

google the only ai which invests mixing llm ai with real ai, and it seems work well.

[dlahoda]

race to the bottom. google in house cheaper inference hardware. anthropic buys it.

[longfacehorrace]

The conclusion Google is engaged in consumer capitalism is wild.

They're engaged in computing research and merely engage in consumer capitalism as a consequence of political and social constraints.

Products are a means to an end not the goal.

OpenAI and Anthropic are product companies and are more likely to fail like most product companies do as they will lack broad and wide depth.

Google has experience in design, implementation, and 24/7 ops with every type of SaaS there is. They can bin LLMs tomorrow and still make bank. Same cannot be said for OAI or Anthropic.

[afavour]

Do they though?

Google does things I hate with their products. But the money printing machine keeps going whrrr faster and faster.

[buccal]

I'm trying paid tier Gemini and it doesn't allow to keep have personal chat history when you disable training on your data, on reload of the page your chat is gone. Even free tier of ChatGPT allows disabling training on your data while allowing to keep such basic functionality.

Some technical advancements are not worth it if you do not respect your users.

[MagicMoonlight]

Yeah I’m never using a Google product. The sole purpose of their company is to be evil. At least other companies are indifferent.

[jiggawatts]

Another basic feature that’s missing is sharing a Gemini chat as a link anyone can view.

OpenAI figured this out: it’s awesome marketing when people send each other links to the app with a convenient text box to continue the conversation. It’s viral.

Google meanwhile set this up so that “anyone with the link can view” is actually “anyone with the link and a Google account”.

That’s grade A failure of marketing.

The PM in charge of that decision ought to be walked off a plank.

[nickysielicki]

How does their top tier subscription compare in usage limits to the $200/mo Claude usage limits?

[Traster]

Well there's a good reason that OpenAI partnered up with Microsoft. The calculation is that the established big techs - Amazon, Apple, Microsoft, Google, Meta are all going to be significantly impacted by AI so it's not unreasonable to look at Anthropic at 10% of their market cap as a reasonable value. Would it be worth Apple to bring Anthropic in house? They failed to deliver AI themselves, they know the risks of being dependent on Google. If AI goes far enough it may totally remove Apple's differentiation.

Some of the Big Techs are building their own in house stuff (Meta, Google), but it wouldn't be crazy to see acquisitions by the others, especially if the market cools slightly. And then there's the possibility that these companies mature their revenue streams enough to start actually really throwing off money and paying off the investment.

[xp84]

> they know the risks of being dependent on Google

I wouldn't argue it's that risky. Look at their past entanglements:

1. Google Default Search Bribe - brings in $20B a year for literally doing nothing

2. Google Maps: Google let them build their own custom app using Google's backend, and it worked fine all the way up until Apple chose to exit that arrangement

actually I can't think of any others, but is there an example of Apple getting burned by Google?

[kiernanmcgowan]

Slight counter point - claude code is basically the only developer tool that ever been happy to pay money for. Getting the entire software industry to give you $200/mo/person is quite the market.

[vitaflo]

That just means they're basically Adobe. What's their valuation?

[chrisjj]

> Getting the entire software industry to give you $200/mo/person is quite the market.

Quite the fantasy, you mean.

[impulser_]

Because it's Google they can't build products and they only care about benchmarking.

The product they released so far are all half assed experiments.

Gemini 3 Pro is now being beaten by open source models because they can't fix or don't want to fix the problems with the Gemini models being completely useless.

The same for Microsoft.

Microsoft had GitHub Copilot, and Microsoft Copilot and both of them are useless to Claude Code and Claude Cowork.

You can have all the money in the world, but nothing is stopping you from building useless garbage.

[rvnx]

Claude is clearly the most superior product right now.

Gemini is absurdly expensive for low quality (3000 USD of tokens are not even worth what you get @ Anthropic for 200 USD).

[Mashimo]

I really like github copilot.

I also tried open code cli and desktop, but how well copilot is integrated into the ide is a plus for me.

What makes them "useless garbage"?

[Aerroon]

I think Google's downfall in a product can easily come from UX. Take livestreaming: YouTube is better on a technical level:

* Higher bitrate

* Ability to rewind

* Able to edit recordings (thumbnails, cutting out dead air etc)

* Much larger userbase

But you know what they fail at? The actual livestream watching UI with chat. There's wasted space, it doesn't darken the rest of it, getting chat on screen with as big of a video window as possible is annoying, the emotes pretty much all suck. And because of that watching on Twitch is a better experience.

Google sometimes fails at the small things. And those small things might be enough for a competitor to build a viable competing product.

You might think that they could easily solve all these problems. Maybe they could, but google.com still isn't equivalent in its mobile and desktop offering in 2026. Eg on desktop page I can select an arbitrary date range to filter results, on mobile I can only select from a preset drop-down at most until 1 year ago.

Could Google fix this? Sure, but I've been waiting for a fix for this for a decade. This isn't something that gave a competitor an edge, but Google being bigger doesn't necessarily mean they get good at the small things.

[2sdd]

You can see their lack of design nouse in their marketing material.

Compare it with Apple.

There is no comparison, its actually laughable and embarrassing how bad they are at it given the resources the firm has its disposal.

[alwillis]

> It’s an impossible war and all these investors are throwing their money into a bottomless insatiable pit of money.

Anthropic went from zero to $14 billion in revenue in less than 3 years, growing at 10x per year.

That's what they're investing in.

Also Anthropic seems laser-focused, unlike some of their competitors who are throwing stuff against the wall to see what sticks.

[Insanity]

Revenue, but what about profit? Google can be cash positive but I’m not sure Anthropic can be the same.

[bdangubic]

Given the amount money that they are spending for vastly subpar products maybe they need to quadruple their capex

[nradov]

Work smarter, not harder: find an innovation that makes LLM computation an order of magnitude more efficient. Easier said than done, of course, but vastly more efficient biological systems provide an existence proof that this is possible in principle. DeepSeek already showed how it's possible to get good results with limited resources.

[Ancalagon]

how does any startup beat an incumbent?

[Esophagus4]

I think GP is probably implying that this particular vertical requires obscene amounts of capital to keep up, which makes it really hard for a startup if you’re going up against businesses with giant free cash flow machines.

It’s the same reason Reid Hoffman sold his AI startup early… he realized he just couldn’t beat Google/FB/MSFT long term if it devolved into a money race.

[tarsinge]

When the incumbent shoot themselves in the foot. Google and Microsoft are consultancy driven bureaucracies with abysmal product culture. At best Google will be the one providing the back end, but it’s very unlikely to me they’ll win the end user product space.

[cantalopes]

Have you ever used anything that is on google cloud console? Or tried not to get randomly ratelimited with a single request to a vertex llm model? They are shooting themselves in the foot for solid 20 years, any of these players can compete with google in this frontier

[subdavis]

I had to install the separate gcloud and gsutil utilities and use one to synthesize a login session for the other this week.

Took fully 10 minutes to install from homebrew.

I do not believe in this company.

[operatingthetan]

Google is playing the datacenter game differently because they have their own hardware.

[ulfw]

Investors still pretend AI is a winner-takes all. The one magic model that will rule all the others forever and ever and gain all the marketshare.

In reality LLMs have proven to be a commodity. Today OpenAI is ahead, tomorrow Anthropic, the next day Gemini and vice versa. Many others, if Qwen or Deepseek are at it's toes and for the majority of people if used unbranded wouldn't even be discernable in difference. Price will dictate who wins. And that is a commodity product.

[lumost]

Anthropic's primary Capex partner is AMZN. AMZN is presently willing to drop 200 billion a year into Capex for compute to rent to anthropic and others. This 30 billion only needs to fund their rental rates - unlike openai and google who need to put in the upfront capex for their compute as MSFT stopped footing the bills.

An interesting question is whether anthropic's capex needs may grow to the point that they can take down AMZN with them should they fail.

[SergeAx]

Google is notorious for creating bad products, and right now, Gravity is the worst ML-assisted code editor on the market, IMO.

Also, I personally experienced a mishap when Google ML-chat was unable to sync chats between the web and mobile clients. To my embarrassment, it turned out that I was using Gemini on the mobile and AI Studio on the web. How Google managed to create two similar products - I don't know, but it was obviously a tremendous misallocation of resources.

[johntiger1]

Google's only focus isn't on Gemini. Anthropic is do-or-die

[IncreasePosts]

Look at Sundar's most recent remarks and tell me Google's isn't only focusing on AI: https://blog.google/company-news/inside-google/message-ceo/a...

Basically "we have youtube subscribers" is the only thing that isn't all about AI, but even that i'm sure they're trying to figure out how to shoehorn AI into that product

[sobkas]

Also Theranos was do-or-die and we know how it ended.

[strawhatguy]

All I know is that claude code is pretty dang good, grok's nice for searching info, and Google's Gemini hasn't really been in my workflow at all. Neither chatgpt, beyond when it first came out.

Maybe I'm odd, but a Google search is even rare (usually use duck duck go) so I don't know, Google may have problems on it's hands. Possible anyway.

[viking123]

Grok is nice because it is not censored like all the other cuck models.

[throwaway911282]

Google has invested in Anthropic. I don't trust that Google will compete on fair grounds with Anthropic on coding. Their common enemy is OpenAI.

[bmitc]

Anthropic's product, in my experience, is leaps and bounds over the competition.

I don't know how profitable any of these companies can be, but if Anthropic fails as a company, they will be purchased for sure. I'm not saying that's good, but I can't see someone just leaving something like Claude to die away.

[beambot]

The same way that Google+ never overtook Facebook

[SkyPuncher]

We're starting to see the nuance come out in what these models are working towards.

* OpenAI - chat that has some character to it.

* Claude - working through thoughts and coding

* Gemini - general reasoning (still blown away by gemini's reasoning, but cannot understand it's inability to tool call - maybe that's been fixed)

[King-Aaron]

These companies are operating outside of "normal" economics. They seem to be fed money against all rational valuations because it is a Manhattan project - the US needs to 'beat' the Chinese with this and as such these companies will probably not be allowed to fold.

[Sparyjerry]

Google has been working on these exact same type of models far longer than all of the new entrants but was unable to make them good enough or useful enough. Money spent does not equate to value created or we would have one big company that runs everything.

[Waterluvian]

The most efficient way Google could spend that money is probably to buy a company and not poke at it too much. I have no confidence that large rich companies can actually innovate beyond buying small innovators or spawning business units and not poking at them much.

[fooey]

it's a race of parallel discoveries sprinting towards commoditization and indistinguishably

any real breakthrough will be instantaneously reverse engineered and replicated

none of the not-googles can win, because there is no win state

[bentt]

I’d guess they want to outlast OpenAI and then get bought by Apple or Amazon.

[causalmodels]

Google will buy Anthropic if it comes to it. Google already owns ~30% of anthropic and Anthropic is running on Google hardware.

[raincole]

> How is Anthropic, OpenAI and xAi

You mean Amazon, Microsoft and Tesla?

[seanhunter]

Strange as it may seem, there was a time when people asked “how will google be able to compete against the likes of aol, who are able to spend $x per year”

[threethirtytwo]

They have the best coding agent around. I would say roughly half the industry no longer writes code by hand and claude is/was the only agent that let me drop my editor all together. That enabler alone is enough signal beyond hype.

Frankly google models and the UIs google designs around their models just aren't as powerful and more training, more data and more compute is no longer tipping the scale. Anthropic did something to make their model better at coding than almost anything else.

And all of this is just what's happening right now. The money being invested is a gamble not on right now... but on the trendline to the future. I agree that the LLMs are overloaded with hype, but the people who compare it to crypto aren't thinking straight. Whether there's over investment or not a paradigm has shifted. Maybe there will be a collapse, but it won't collapse into a singularity. If it collapses at all, a new world will emerge, and that new world will generate more value than all the money currently invested in AI.

[bastawhiz]

Until a version of Gemini is released that can fix one (1) bug in my codebase, I'm not worried for any of those companies.

[ramshanker]

At least xAI now has a revenue generation backer. SpaceX.

Others must pull up their revenue number.

[el_nahual]

SpaceX makes 16B in revenue per year, with 7B in ebitda (which doesn't account for the cost of rockets)... so assume what, 3B in free cash flow per year? And that's being generous.

That's about what Google creates in free cash every 2 weeks.

[rizpanjwani]

Google is invested in Anthropic

[YZF]

They're frenemies. The likes of Google also host Anthropic and OpenAI.

[dolphinscorpion]

Make the pie higher, a US President once said. I will leave it at that

[nightski]

How long is Google going to be able to keep selling search engine ads?

[HardCodedBias]

Let's be real.

Google leadership is pathetic.

Sundar "the manager" has presided over an enormous growth of the businesses he was handed. He also presided over the complete collapse of the internal culture. OTOH he may have fired Dianne Green, so that's something. Overall, at best Meh.

Demis ran a startup that burnt cash on vanity projects and continues to burn cash on vanity projects. Gemini is barely open source quality AI, but Google makes it nearly free and has the best distribution on the planet.

Gemini has been a joke since 1.0. No release has hurt Google's brand more. 3.0 was STOA for about 2 days, easily Gemini's best release.

Anthropic and OAI are moving at amazing pace, Google can not keep up at all.

[deadeye]

Google also has the most to lose.

[pazimzadeh]

just want google to have good web apps again, it's so bad on desktop

[rhubarbtree]

Culture.

[protocolture]

I mean, you gotta spend the 200B on the right things.

[hulitu]

They made a C compiler. Google has no C compiler. Win. /s