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Curious to hear if Google is in trouble here or not. Keep seeing comments and articles elsewhere that say this Chat stuff is undermining Google and we could be in trouble.

Anyone have insights or a crystal ball?

I don't have any great insight to offer, but my thoughts are that Google has been a leader in AI research for decades and they sit in a position of strength. While OpenAI's ChatGPT and Microsoft's integration of it into Bing has certainly caused a splash, I feel like Google will be able to counter effectively in the coming years.

Given ChatGPT's proclivity to make up stuff, I certainly wouldn't embrace it as a replacement for Google, though I do see it's utility for some things.

I have been concerned by a couple of stories I read in the last couple months by former Google employees talking about the company becoming sclerotic with its size and wealth effectively discouraging innovation and productivity. They said it's hardly the hotbed of innovation it once was, with employees stultified by bureaucracy and caution. Then I read a story about how that was endemic across big tech, with coders effectively discouraged from high productivity because of everyone acting to protect their salaries and turf by building in ridiculous timelines with countless meetings for relatively small amounts of work.

I don't really know what to think. It sounds ripe for smaller companies to disrupt, but I think that's kinda always been the case. I know Google has an enviable position, immensely deep pockets, enormous stockpile of talent and intellectual property, but it sounds like they seriously need to streamline the work processes, work to upgrade their internal tech work environment, and empower employees to be more productive.

I invested in Google about a year ago with a cost basis slightly below current stock price on the basis of their position and earning power. It seemed like it would be hard for them to screw things up so fast that the purchase would be bad, and I don't see the emergence of ChatGPT and other AI as changing that investment thesis at these prices.

The Investor Day transcript from Sequoia Fund was circulating around the BRK board, and has an insightful response on the issue at page 11 - 12:

https://www.sequoiafund.com/Download.aspx?ID=0bde9...

One point that is made is how market share for search hasn't really budged, and this is evidence that the rise of AI hasn't breached Google's moat re: Search. To illustrate, take a look at the 12-month chart for global search, across all platforms:

https://gs.statcounter.com/search-engine-market-sh...

Bing has typically done best on Desktop, which isn't exactly where you want to be, but even there it is hard to see how Google is being displaced from its position as the clear leader in search. Here's worldwide for Desktop searches:

https://gs.statcounter.com/search-engine-market-sh...

Perhaps that last squiggle from May to June, upwards, finally marks a shift in the Desktop-search market (note the Bing-increase isn't there for mobile or tablet). It may be tracking MSFT's recent Bing add on to premium ChatGPT (May 23), and other efforts. But an interesting thing here is that Bing's inch upward to 8.74% (June) is still below what it was achieving in the months before the release of ChatGPT (Nov 30, 2022), where 9% was not uncommon.

Maybe the change is in the making. I have a hard time seeing it materializing.

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