I don’t read this shakeup like the rest of the world. I read it like they don’t need to innovate further in the space but will continue to roll it aggressively into all of their services and optimize it for everyday use by regular people. It may also signal they found the ceiling like some of us have suggested was near.
$132 billion isn't enough money to run a company on. At this point, Google is going to have to go to the US government and ask for a multi-trillion dollar bailout to stay afloat.
Because Google is one $5 mistake away from declaring bankruptcy, they can't even afford H1-B labor at this point.
I think it's time to short GOOG all the way down to $0.
Shorting a company that just pulled $120B in a single quarter, sits on $240B+ in cash, expanded operating margins to 34%, and holds a $500B+ Cloud backlog because they borrowed cheap long-term money to build AI centers is... certainly a choice.
You live under the delusion that a paltry $132 billion is enough to run a company on; did you not read the line in this post that said that it's worrisome that el Goog has went to the bond market looking for cash?
Calling $162+ billion in liquid cash 'paltry' while completely misunderstanding why AA+ rated mega-caps issue debt is wild.
Google doesn't go to the bond market because it's broke; it goes because institutions line up with $100B+ in orders to lend them money at low fixed rates. S&P literally gives them an adjusted net leverage of 0.0x.
If you want to short a company generating $40B in operational profit a quarter because they know how to utilize corporate debt markets, go for it lol the market will appreciate the liquidity.
Let’s not forget that many bonds in 2007-2008 were rated AAA but were ultimately failed during that financial crisis. Ergo, your bond rating argument is not persuasive.
If Google can’t deliver orders on $40 billion in profit with $100 billion in outstanding orders as you claim, it’s got a much bigger problem as a company and is worthy of shorting.
We’ll review your comment in a year and see if Google is still in business OR if it has run to the government for a bail out. I can’t wait to read your public apology for being so wrong.
Comparing subprime mortgage-backed structured CDOs from 2008 to simple corporate bonds backed by $40B in quarterly operational earnings shows a fundamental misunderstanding of corporate finance.
Google isn't a bank with hidden toxic subprime assets. It's an enterprise tech giant with $120B in quarterly revenue, $160B in cash, and 34% profit margins.
Are you doing some kind of troll engagement strategy you spout ridiculous comments and when people reply, you restack them with your comment?
Roger that. I think it is perhaps better to consider Alphabet. YouTube is a monster. I have personally found Google Gemini to be much more reliable than OpenAI, although I use both. I think that they have effectively co-opted AI in addition to their search business, and Gemini is informed by literally decades of search, so it has a much better sense of what is reliable and what is not. It is much superior to OpenAI as far as I am concerned for fact-checking, although OpenAI is getting better as time goes by. I think that they will be able to monetize the AI search as well as the traditional SERP pages. They are sort of like Elon Musk. They do not just sit there and cling to an outmoded business model. They are always looking for the new new thing. As you say, their revenue is the kind of problem I think almost any company would like to have.
Not really. They all have their attributes and weaknesses
Gemini is like a young engineer that thinks it knows everything and gets out over it's skis often
Grok is like a super research assistant. Let me at'em. Let me do the searches boss and show you what I know. Let me show you all I know about Math and Physics. But then it stops short of brilliant ideas.
Claude is an old curmudgeonly engineer that's seen pretty much everything once or twice. It is super conservative, want's to base every thing on facts that it can verify, but doesn't have the research skills that Grok has. To Gemini it says "hold my beer, son".
Counting them out of what? reaching AGI/ASI or having a profitable LLM chatbot?
Realistically isn’t Deepmind still the only player (out of the major ones you listed) that has a shot to AGI? as they are the only people who aren’t putting all the eggs in transformers and scaling laws, the only one that is doing science, and not all product marketing?
Anthropic has the same, arguably worse, declining reputation by continuing to pretend to be the good guys while stealing and destroying books and dreaming about achieving ASI via RSI (Claude Code) in 2-5 years. Claude Code is neat, not RSI neat though. Most of their “breakthroughs” so far seem to be direct applications of academic researches on their proprietary models, not anything developed in house.
I think you hit the right issue in terms of a whether a race to dominate the LLM market is even the end goal. That makes sense if people think of AI as competition for search and other administrative and organizational tasks that can be automated (at least partially). The bigger question is how society will develop and use the formative elements of AI (data base analysis, algorithms, software, communications, etc.) in a wider range of research and other learning activities. This is much bigger than Google. It like thinking about the beginning of electric power and asking what people would do with it. Most of the gains will come from the end-user applications.
Yes and to make matters worse some competitors (DuckDuckGo for one) have no-AI versions of their search engines on offer. I moved away from Google aeons ago and off AI as soon as possible. It is a necessity for me because I need to be able to cite actual sources for the data I use.
Well said, Stephen. I left Google long, long ago ~ and I'm currently using DDG's no-AI version now.
Reminds me of the very best comment I've ever heard about using AI for "search":
"The difference between AI and pre-AI. . . . Google gave you 4 million web sites that were the answer to . . . [your] question. . . . Today, ChatGPT will give one very articulate answer . . . and it will position that answer as the truth. If you are not the most intelligent man alive, or woman alive. , you'll believe it. . . . Very few of us go back to ChatGPT and say, "Where the f**k did you get that from?"
would you agree that Google also has the advantage of having a very strong head start in RDF based knowledge graphs (their original knowledge panel and schema.org focus) which could help them towards a more "Cognitive AI" advantage? I would think that Google's focus on structured content and the meaning behind structured content (semantic markup) would give them an advantage in neurosymbolic AI.
The key question with LLMs right now is what exactly is the "product." OpenAI and Anthropic are both trying a little bit of everything, but they haven't found anything that will turn a profit.
To Google, our personal data is the product. LLMs to them are just another fancy data harvesting tool. Do they profit from having the LLM that can solve leading edge math or hack the Pentagon, or does a good enough LLM integrated into their platforms do the data harvesting job well enough?
Google maes their own inference chips, they don't need Nvidia chips. That is a hard, objective, edge no one has. Gemini has improved considerably in the last few months. It is not their research product that is the problem it is they undermined their walls destroyed their cash reserves and their cap ex.
Right, it's not wise to count them out, but another question is, does this indicate any sort of change in focus away from LLMs to other architectures? Just based on where they're moving their talent. Hard to read from the outside, of course. Also, if Hassabis and any other key talent who were reshuffled leave after this in a year or so (like LeCun did from Meta) does it say something else? Yeah it's tea leaves, and their competitors are no strangers to churn, so best to not read too much into it, but... asking "is all this indicative of limits to the current approach" is not unreasonable.
I've really come around to Gemini 3.1 pro on Android. I find it to be the best agent for performance v. speed for search tasks. Further, it's deep integration into my decades of Google data make it genuinely the most useful assistant on Android. I expect deeper Android integration, as in native phone-use to some degree. I also think it has the better visual branding of the 3.
I see this shake up as a good thing. I think it'll resolve to new energy and ideas for their next gen push.
I don’t read this shakeup like the rest of the world. I read it like they don’t need to innovate further in the space but will continue to roll it aggressively into all of their services and optimize it for everyday use by regular people. It may also signal they found the ceiling like some of us have suggested was near.
$132 billion isn't enough money to run a company on. At this point, Google is going to have to go to the US government and ask for a multi-trillion dollar bailout to stay afloat.
Because Google is one $5 mistake away from declaring bankruptcy, they can't even afford H1-B labor at this point.
I think it's time to short GOOG all the way down to $0.
This is probably the worst take I’ve read on Substack. Seriously impressive work.
Thank you.
I had to work hard to earn this reputation.
I think, "I think it's time to short GOOG all the way down to bankruptcy" would be better advice.
That way, you're covered even if it's your own bankruptcy. 😉
Nicely played, Sir.
Shorting a company that just pulled $120B in a single quarter, sits on $240B+ in cash, expanded operating margins to 34%, and holds a $500B+ Cloud backlog because they borrowed cheap long-term money to build AI centers is... certainly a choice.
You live under the delusion that a paltry $132 billion is enough to run a company on; did you not read the line in this post that said that it's worrisome that el Goog has went to the bond market looking for cash?
I'll pray for you.
Calling $162+ billion in liquid cash 'paltry' while completely misunderstanding why AA+ rated mega-caps issue debt is wild.
Google doesn't go to the bond market because it's broke; it goes because institutions line up with $100B+ in orders to lend them money at low fixed rates. S&P literally gives them an adjusted net leverage of 0.0x.
If you want to short a company generating $40B in operational profit a quarter because they know how to utilize corporate debt markets, go for it lol the market will appreciate the liquidity.
Let’s not forget that many bonds in 2007-2008 were rated AAA but were ultimately failed during that financial crisis. Ergo, your bond rating argument is not persuasive.
If Google can’t deliver orders on $40 billion in profit with $100 billion in outstanding orders as you claim, it’s got a much bigger problem as a company and is worthy of shorting.
We’ll review your comment in a year and see if Google is still in business OR if it has run to the government for a bail out. I can’t wait to read your public apology for being so wrong.
Comparing subprime mortgage-backed structured CDOs from 2008 to simple corporate bonds backed by $40B in quarterly operational earnings shows a fundamental misunderstanding of corporate finance.
Google isn't a bank with hidden toxic subprime assets. It's an enterprise tech giant with $120B in quarterly revenue, $160B in cash, and 34% profit margins.
Are you doing some kind of troll engagement strategy you spout ridiculous comments and when people reply, you restack them with your comment?
> Google isn't a bank with hidden toxic subprime assets.
Citation Needed
I especially appreciate the 007 reference, regarding the bonds. Well played!
That was only coincidental.
Irrational at best, how can you be taken seriously with comments like that. I would definitely edit with more substance.
the same way that people take you seriously: it's called "the internet".
This is ridiculous.
This commented added a lot to the conversation.
You forgot the /s
Not sarcasm, ergo no `/s`
Roger that. I think it is perhaps better to consider Alphabet. YouTube is a monster. I have personally found Google Gemini to be much more reliable than OpenAI, although I use both. I think that they have effectively co-opted AI in addition to their search business, and Gemini is informed by literally decades of search, so it has a much better sense of what is reliable and what is not. It is much superior to OpenAI as far as I am concerned for fact-checking, although OpenAI is getting better as time goes by. I think that they will be able to monetize the AI search as well as the traditional SERP pages. They are sort of like Elon Musk. They do not just sit there and cling to an outmoded business model. They are always looking for the new new thing. As you say, their revenue is the kind of problem I think almost any company would like to have.
OpenAI aka ChatGPT is the IE 5.5 of AI.
Saying that Gemini is better than ChatGPT is like claiming you've picked up a turd by the clean end: it's just not possible.
If you want an AI that works, use Grok. It cost $8/mo to use the browser on X.com's website. (https://x.com/i/grok)
Not really. They all have their attributes and weaknesses
Gemini is like a young engineer that thinks it knows everything and gets out over it's skis often
Grok is like a super research assistant. Let me at'em. Let me do the searches boss and show you what I know. Let me show you all I know about Math and Physics. But then it stops short of brilliant ideas.
Claude is an old curmudgeonly engineer that's seen pretty much everything once or twice. It is super conservative, want's to base every thing on facts that it can verify, but doesn't have the research skills that Grok has. To Gemini it says "hold my beer, son".
Counting them out of what? reaching AGI/ASI or having a profitable LLM chatbot?
Realistically isn’t Deepmind still the only player (out of the major ones you listed) that has a shot to AGI? as they are the only people who aren’t putting all the eggs in transformers and scaling laws, the only one that is doing science, and not all product marketing?
Anthropic has the same, arguably worse, declining reputation by continuing to pretend to be the good guys while stealing and destroying books and dreaming about achieving ASI via RSI (Claude Code) in 2-5 years. Claude Code is neat, not RSI neat though. Most of their “breakthroughs” so far seem to be direct applications of academic researches on their proprietary models, not anything developed in house.
I think Google (in Hassabis) also has a better overall strategy, focusing on hybrid AI instead of grinding more data through their transformers.
8. Demis is a chess master. Everyone else is playing checkers.
I think you hit the right issue in terms of a whether a race to dominate the LLM market is even the end goal. That makes sense if people think of AI as competition for search and other administrative and organizational tasks that can be automated (at least partially). The bigger question is how society will develop and use the formative elements of AI (data base analysis, algorithms, software, communications, etc.) in a wider range of research and other learning activities. This is much bigger than Google. It like thinking about the beginning of electric power and asking what people would do with it. Most of the gains will come from the end-user applications.
Google is already losing search by converting it to AI.
Why isn't this already another serious red flag?
Yes and to make matters worse some competitors (DuckDuckGo for one) have no-AI versions of their search engines on offer. I moved away from Google aeons ago and off AI as soon as possible. It is a necessity for me because I need to be able to cite actual sources for the data I use.
Well said, Stephen. I left Google long, long ago ~ and I'm currently using DDG's no-AI version now.
Reminds me of the very best comment I've ever heard about using AI for "search":
"The difference between AI and pre-AI. . . . Google gave you 4 million web sites that were the answer to . . . [your] question. . . . Today, ChatGPT will give one very articulate answer . . . and it will position that answer as the truth. If you are not the most intelligent man alive, or woman alive. , you'll believe it. . . . Very few of us go back to ChatGPT and say, "Where the f**k did you get that from?"
~ Mo Gawdat | https://bra.in/3joWP5
would you agree that Google also has the advantage of having a very strong head start in RDF based knowledge graphs (their original knowledge panel and schema.org focus) which could help them towards a more "Cognitive AI" advantage? I would think that Google's focus on structured content and the meaning behind structured content (semantic markup) would give them an advantage in neurosymbolic AI.
They're definitely not out but this is a pretty significant sign
The key question with LLMs right now is what exactly is the "product." OpenAI and Anthropic are both trying a little bit of everything, but they haven't found anything that will turn a profit.
To Google, our personal data is the product. LLMs to them are just another fancy data harvesting tool. Do they profit from having the LLM that can solve leading edge math or hack the Pentagon, or does a good enough LLM integrated into their platforms do the data harvesting job well enough?
Don’t forget Berkshire Hathaway’s recent investment in Google!
Probably lowers his chance of being deposed in Gavalas v. Google or a similar suit
Google maes their own inference chips, they don't need Nvidia chips. That is a hard, objective, edge no one has. Gemini has improved considerably in the last few months. It is not their research product that is the problem it is they undermined their walls destroyed their cash reserves and their cap ex.
Right, it's not wise to count them out, but another question is, does this indicate any sort of change in focus away from LLMs to other architectures? Just based on where they're moving their talent. Hard to read from the outside, of course. Also, if Hassabis and any other key talent who were reshuffled leave after this in a year or so (like LeCun did from Meta) does it say something else? Yeah it's tea leaves, and their competitors are no strangers to churn, so best to not read too much into it, but... asking "is all this indicative of limits to the current approach" is not unreasonable.
Agreed on the points.
I've really come around to Gemini 3.1 pro on Android. I find it to be the best agent for performance v. speed for search tasks. Further, it's deep integration into my decades of Google data make it genuinely the most useful assistant on Android. I expect deeper Android integration, as in native phone-use to some degree. I also think it has the better visual branding of the 3.
I see this shake up as a good thing. I think it'll resolve to new energy and ideas for their next gen push.