Google May Have an Under-Appreciated Advantage in the AI Arms ...
Alphabet’s position in the AI race has been a topic of concern among investors, with recent research by Morgan Stanley suggesting that Google may have a notable advantage that is often overlooked.
Usage Trends
According to Morgan Stanley, Google’s Gemini platform showed a significant increase in usage between September and March compared to its competitors, Meta AI and OpenAI’s ChatGPT. In March, about 40% of survey respondents used Gemini on a monthly basis, slightly trailing behind ChatGPT at 41% and surpassing Meta AI at 39%.
Gemini also emerged as a popular choice for commercial purposes, with 46% of respondents using it for product research, 37% for price comparisons, and 34% for shopping. In comparison, ChatGPT was used by 41% for product research, 31% for price comparison, and 25% for shopping, highlighting Gemini's broader commercial appeal.
Implications for Google
The analysts at Morgan Stanley noted that Google’s established user behavior within commercial activities is a significant strength for the company. To maintain its position at the top of the commercial funnel, Google needs to continue enhancing Gemini/TPU capabilities across its user base and datasets.
Concerns have been raised by investors regarding the potential impact of AI on Google’s core search business. Recent comments from an Apple executive have fueled fears that the increasing prevalence of AI could threaten Google’s dominance in the online search market.
In addition to external pressures, Google also faces scrutiny from antitrust regulators following accusations of operating an illegal search monopoly. Regulatory recommendations include the potential divestment of the Chrome web browser and increased data sharing with competitors.
Google's Response
Google is expected to emphasize commercial applications during its upcoming Google I/O developer conference, with CEO Sundar Pichai delivering the keynote address. The company will showcase its AI stack, Gemini API, and Gemma open models to developers, highlighting its commitment to AI innovation.
Analysts at Wedbush believe that Google is entering a phase of AI innovation, suggesting that concerns regarding the company's search business are exaggerated. The upcoming conference could play a crucial role in reshaping the narrative around Google's AI capabilities.
