No. of Recommendations: 6
In two separate cases, the US Department of Justice found that Google had illegally maintained monopolies in the online search engine market and in digital ads. Remedies could have included being forced to sell or split off Chrome, Android, or possibly portions of its ad business. This was settled in September, when the judge found that only minor remedies were needed (presumably Google will appeal, but it won't get any worse). In part, somewhat incredibly to me, the judge reached this conclusion because the emergence of AI is disrupting the market.
One thing we know about Buffett is that he hates uncertainty. It tracks that he would wait until after the lawsuits were settled before pulling the pin.
In the meantime, Google's business model basically boils down to improving search, which improves ad placement, which improves ad rates. Last summer, Sundar said that AI is improving ad click throughs. So maybe AI will help them come out a winner. Google almost fumbled this whole thing. Google invented the generative pre-trained transformer, but they weren't first to market. And from my own subjective experience, I'd say ChatGPT still beats Gemini. But they refocused quickly and are now all in. I don't know how this plays out, but I'd say it is likely Google will be one of the AI winners.
