Every once in a while, the rise of a serious competitor can spur a dawdling incumbent into action.
That’s the counterintuitive argument put forward by David Friedberg, entrepreneur and co-host of the popular All-In podcast, in a recent episode. Friedberg, who previously worked at Google as an executive and has a deep understanding of the company’s culture, offered an interesting perspective on the AI race between Google and OpenAI. His thesis: OpenAI’s meteoric rise may have been the best thing that ever happened to Google—not despite the competitive threat it posed, but because of it.
“No greater blessing has ever happened to Alphabet than OpenAI’s rise,” Friedberg declared. “Not only did it create the foil for Google in the monopoly sense, but it also took the attention away from Google, focused in on OpenAI, and that attention fundamentally damaged OpenAI’s strategic product capabilities because they had to start to be so much more careful about what they said, how they said it.”
According to Friedberg, while regulatory scrutiny and public attention descended on OpenAI following ChatGPT’s viral launch in late 2022, something remarkable was happening inside Google. “The opposite was happening at Google at the same time, which is Larry, Sergey, and Sundar being given permission by the board to take risk, to go hard, to figure this out. Boom. It’s amazing how the horse race has changed.”
Friedberg identified the root cause of Google’s initial hesitation in the AI space. “The reason Google didn’t lead into AI for years, even though they had the technology, is because they were nervous about cannibalization to search. They were nervous about the quality of the product. They didn’t want to release things too early, and then they changed their posture.”
But here’s where Friedberg’s analysis becomes particularly sharp. He argues that the very spotlight that propelled OpenAI to prominence has now become its constraint. “I would argue it’s the opposite at OpenAI in the last couple months. I used to use Advanced Voice on ChatGPT all the time. I cannot stand it anymore. I do not use it. It has basically hedged away all of the value because it tries to be polite. It tries to make sure that it’s giving you warnings all the time. It doesn’t want to give you data because it’s scared that it might give you the wrong data. OpenAI has been acting like an incumbent fearful of losing market share and fearful of getting attacked in the media and attacked by consumers for saying the wrong thing.”
The implications of this role reversal are profound. Google, long criticized for being too cautious with AI despite pioneering transformer technology and having DeepMind in its stable, has recently shown renewed aggression. The company has rapidly iterated on its Gemini models, integrated AI across its product suite, and made bold moves like combining Google Brain and DeepMind. Meanwhile, OpenAI—once the scrappy upstart willing to “move fast and break things”—has faced mounting pressure over safety concerns, copyright issues, and the dramatic boardroom coup that briefly ousted Sam Altman. These controversies have seemingly made the company more risk-averse precisely when its first-mover advantage demands continued innovation.
The pattern echoes classic examples of disruption theory gone sideways. Just as Microsoft’s antitrust battles in the late 1990s created space for Google to rise, and just as Google’s dominance invited regulatory scrutiny that arguably constrained its social media ambitions, OpenAI’s success has invited the kind of attention that can calcify a young company’s culture. Google, freed from the spotlight and armed with massive resources, deep talent, and renewed permission to take risks, may have gotten exactly what it needed: a credible threat that justified bold action, and a competitor shouldering the burden of being the industry’s lightning rod.