Google: The AI Company

Bullish:

• $GOOGL - Google has multiple underappreciated competitive advantages in AI including TPU chips at near-NVIDIA scale, exceptional profitability generating $140B in annual profit (more than any other tech company), successful AI monetization that has funded all other bets, and the DeepMind acquisition worth potentially $500B today - comparable to Instagram or YouTube as one of the greatest acquisitions ever

  • “Google has, like, an almost NVIDIA scale internal thing making their own chips at this point for their own and for Google Cloud customers. The TPU is a giant deal in AI in a way that I think a lot of people don't realize.”

    Ben·1:50:18

  • “Google still has a crazy bench of talent. And despite ChatGPT becoming kind of the Kleenex of the era, Google does still own the text box, the single one that is the front door to the Internet for the vast majority of people anytime anyone has intent to do anything online.”

    Ben·3:40

  • “Over the last 12, Google has generated $370,000,000,000 in revenue. On the earnings side, they've generated a 140,000,000,000 over the last twelve months, which is more profit than any other tech company.”

    Ben·3:18:16

  • “They bought this thing for we'll talk about the purchase price, but it's worth, what, $500,000,000,000 today? I mean, this is as good as Instagram or YouTube in terms of greatest acquisitions of all time.”

    Ben·1:00:16

  • “Astro Teller, who would take over running Google X after Sebastian Thrun left. He would get quoted in the New York Times in a profile of Google X that the gains to Google's core businesses in search and ads and YouTube from Google Brain have way more than funded all of the other bets that they have made within Google X and throughout the company over the years.”

    David·56:53
• $WAYMO - Waymo represents a potential Google-sized opportunity as a standalone company, with 10x safety improvements over human drivers that could save $420B annually in crash costs nationwide, and is already surpassing Lyft's gross bookings in San Francisco

  • “So if you reduce crashes 10 x, which is what Waymo seems to be saying in their data, at least for the serious crashes, that's over $420,000,000,000 a year in total costs that we would save as a nation... You could see a path to a Google sized opportunity for Waymo as a standalone company”

    Ben·3:07:18
• $NVDA - NVIDIA maintains extraordinary pricing power with 75-80% gross margins, implying a 4-5x markup on chip manufacturing costs, demonstrating their dominant position in AI infrastructure

  • “Everyone is paying NVIDIA $75.80 percent gross margins, implying something like a four or five x markup on what it costs to make the chips.”

    Ben·3:36:17
• $AIINFRA - AI infrastructure investments offer significant returns as even small percentage improvements on tens or hundreds of billions in revenue generate substantial value

  • “It's one of these things that if you make something a few percent better that happens to do tens of billions of dollars or hundreds of billions of dollars in revenue, you find quite a bit of loose change in those couch cushions.”

    Ben·57:03

Bearish:

• $OPENAI - OpenAI and other foundational model companies lack self-sustaining funding and remain dependent on external capital, operating essentially as startups despite their scale

  • “None of the model makers have self sustaining funding. So they're all dependent on external capital... Basically, all the other large scale usage foundational model companies are effectively startups.”

    Ben·3:34:13
• $MSFT - Microsoft's AI positioning is limited to cloud infrastructure without the full-stack AI capabilities that competitors like Google possess

  • “Microsoft Cloud. It's just cloud. Right? They make some models. But... Cloud. Cloud.”

    David·3:30:11