Google Part III: The AI Company. Google is amazingly well-positioned... will they win in AI? (audio)
Acquired’s Ben Gilbert and David Rosenthal argue Google is uniquely positioned to win AI but faces history’s clearest innovator’s dilemma, having invented the Transformer yet ceding the ChatGPT moment to OpenAI.
- Google invented the Transformer (2017) and employed virtually every major AI figure — Sutskever, Hinton, Amodei, Karpathy, Hassabis — before they founded rival labs.
- Google Cloud hit $50B revenue; Google is the only company with both a frontier AI model and proprietary AI chips (TPUs), making it potentially the lowest-cost token producer.
- Token volume grew ~50x in one year: 10 trillion tokens processed in April 2024 vs. nearly 500 trillion in April 2025, approaching 1 quadrillion by June 2025.
- Waymo has driven 100M+ miles driverless, completes hundreds of thousands of paid rides weekly across 5 cities, and shows 91% fewer serious-injury crashes vs. average human drivers.
- Waymo’s total investment of $10–15B equals roughly one month of Google’s profits, yet CDC data suggests a 10x crash reduction could save $420B+ per year in the US alone.
- Google currently earns ~$400/user/year from search; no clear ad model exists yet for AI chat, where average query length is 20+ words vs. 2–3 for search.
- Bear case: AI search market share likely settles at 25–50% for Google vs. 90% in traditional search, and high-value query categories like travel and health are migrating to AI first.
2025-10-06 · Watch on YouTube
