RIP OpenAI? Apple Dumps ChatGPT for Google Gemini!

So it looks like there has been some pretty bad news for OpenAI. So let's talk about it. So one of the things we need to talk about is the fact that Google and Siri have entered into a multi-year collaboration with the next generation of Apple Foundation models being based on Google's Gemini's cloud technology. This is big news. Now, I don't think people realize just how big of a story this is because most people don't realize that the domination in terms of AI is currently a very, very scary and crazy battlefield. These AI companies realize that the products that are in now will probably be grandfathered in. Meaning that if you have the ability to actually make a good AI product and people continue to use it, it becomes very hard to create a completely new habit when it comes to acquiring users. The point I'm trying to make here is that all of the top AI companies are trying to lock down the biggest distribution channels and Google just be opening eye to the punch. So it's pretty crazy because one of the things that we always would have thought is that chat GBT is the go-to model for very large companies. Now with this statement from Google, we can see that Apple independently determined that Google's AI technology provides the most capable foundation for Apple's foundation models. and they're excited about the new innovative experiences that it will unlock for Apple users. Now, the reason that this is so crazy is because we all knew Siri was eventually going to get an upgrade, but nobody could have predicted that the upgrade would be coming from Google's base foundation models. Now, it's quite likely that it won't be named Google Gemini in the app. They probably will just call it the Siri models, but it's clear that Google's AI technology are going to be the base for the foundation models that they're either going to be on device or in the cloud. And I'm pretty sure if you asked this question to anyone from a year ago, they would have told you that it has been chat GBT. Now, this is super interesting because if you hadn't watched my previous video, you'll maybe not realize just how powerful of a position Google is in. And that has called into question from Elon Musk. Elon Musk says that this seems like an unreasonable concentration of power for Google given that they also have Android and Chrome. Now what Elon Musk is referring to here is the fact that Google are a company that are basically in every industry when it comes to tech. If you can think about AI and any sort of technology that is part of the future, Google have their grips firmly rooted in there. And one of the clear areas that Google have their grip on is clearly the distribution networks. Now what I mean by this is that distribution is the ability to get your product into consumers easily. And think about it like this. If Google are simply able to get their Google Gemini models onto every iPhone and they have a good relationship with Apple, that means that they basically own the entire own marketplace. Think about it, guys. When you're on Android, the default chatbot is going to be a Google Gemini from the Google Assistant. And if you're on Apple now, it looks like that default model is going to be a Google Gemini powered model. Meaning that basically if you have a phone device, the default model that you're going to have on every single phone, whether it be Android or iOS, which is basically 98% of the market, is going to be powered by Google. And that's why Elon Musk is saying that this seems like an unreasonable concentration of power given that they also have Android and Chrome. And the reason that he's saying that is because everyone uses Chrome and of course in Chrome there is Google Gemini embedded into it in certain places. So, do you guys think this is unreasonable? Me personally, I think maybe slightly, but at the same time, I do think that Google is probably the company that is best at this and it kind of does make sense for them to be doing this considering all of OpenAI's shortcomings. Now, one of the things that people won't talk about, and forgive me for this terrible graphic, but is the fact that one of the things in the statement that Apple said shows us a clear reputation loss for ChatGpt. Apple's statement was particularly pointed, noting that after careful evaluation, they determined Google's technology provides the most capable foundation. And this means that the world's most valuable brand, which is Apple, publicly labeling Google's AI as more capable as than OpenAI's, is just a major PR defeat. Sam Elman's team, especially amid rumors that OpenAI has been struggling with reasoning in its latest models. What I'm trying to say here is that this is not a good look if you have one of the most noticeable brands premium brands in the entire world saying that look is not as good as Gemini and so we're picking Google from the mass point of the consumer I mean most consumers probably won't realize what model is being called but for many in the tech industry and many around this starts to raise the question can Openi still compete at the level that they need to in order to retain customers on that level now it's not just a problem there. There's also the income loss. Google and Apple already have a financial relationship. They have a $20 billion a year search deal. And by folding AI into this partnership, there's increased sustainability.

Reports suggest that Apple may be paying Google upwards of a billion dollars a year for Gemini Access. Compare that to OpenAI. OPI is spending billions of dollars on compute and talent without the same level of diversified revenue that Google via their ads in the cloud or the Apple via their services possess. Losing a potential multi-billion dollar foundational contract with Apple makes OpenAI's path to profitability much harder. The point I'm trying to make here, as I'm always saying, look guys, OpenAI is going to be losing out on that potentially billion dollar deal. all of that income that Apple would be paying them. That is going straight into the pocket of Google. So, OpenAI just lost a potential large market share, which is once again not a good thing. Now, honestly, one of the things that I would say is that maybe don't try and take on Apple. I do think that maybe this was kind of office politics, not office politics, company politics, tech politics. But there were growing reports that the relationship between Apple and OpenAI soured because OpenAI is working on its own AI hardware which is a project involving Apple designer Johnny IV. Now Apple generally avoids partnerships with those who are aiming to compete directly with the iPhone. And so it seems like Apple were like okay if you want to steal our X designer and you want to compete with us on products then why don't we just go ahead and give the deal to Google Gemini. You can see here that Apple's former CEO said that the company has its first real competitor in decades. Apple's former CEO John Skully said that OpenAI represents Apple's first competitor in decades and he said that Apple needed to shift from the apps era to the agentic era in the AI race. Now the reason I included this because I think it was very clear that OpenAI wasn't positioning itself as an AI company. They were starting to position themselves as this Applelesesque brand in the sense that they were trying to take on Apple and still are trying to. And in doing so, they've essentially sort of created their own hell because if you're going to compete with Apple, Apple is going to make it hard for you to actually compete with them. They're not going to pave the way for you to have easy access to their products. They're going to go ahead and promote Gemini and tell the world your products aren't good enough. And you know what the craziest thing about this is? This is why I don't think they should have tried to take on Apple, is that companies are not going to play fair. So, I remember I was browsing Twitter a few days ago and I saw that chat is no longer available on WhatsApp. Now think about it, right? The reason that chatbt is no longer available in WhatsApp and many people did actually use it this way is simply because of the fact that Meta decided to remove their access and this is why I say you have tech politics where tech companies are going to silently undercut their other companies in terms of their possible distribution. You can see that Chad GBT no longer being available in WhatsApp is a key strategic decision from Mark Zuckerberg's team at Meta to undercut Chat GBT and promote their own AI models and services. Of course, WhatsApp is owned by Meta, so this clearly makes sense. The point I'm trying to make here is that guys, it's clear as day that Apple and other companies that are competing with OpenAI are already a huge part of the tech space and they're probably going to be cutting out chat GBT and making it much harder for them to integrate into your daily lives. considering that they own the hardware, the software, and services for many of the products that we use on a day-to-day basis. This is just something that increases the friction for a user to use the app versus them going ahead and using the standard model. And what's crazy about this is that OpenAI allegedly made a conscious decision to not become the custom model provider for Apple and instead would work on its own AI device to go past the tech titans the news outlet added. So, I was doing some research and apparently it says that OpenAI didn't even want to be on Apple's devices. But I truly don't believe them. I don't think this makes sense. There is literally no downside to being on Apple devices. I just think they probably flew too close to the sun and they got burnt. And of course, I've already spoken about the loss of distribution, but I think you guys clearly understand that Gemini powering both of the most important devices is pretty incredible. Now, of course, there is public opinions. Some people are saying Sam Cookman Openi is so screwed. And yeah, this isn't a good look, but I think OpenAI are a very, very interesting company. They are in a very tough spot. And so, it's going to be super interesting to see how they come back from this. Usually, OpenAI has a funny way of rising from the ashes. So, even if it does look like they're screwed, somehow they come back. Maybe they launch their hardware product and they're able to make billions of dollars from it. I mean, I know Apple's EP Apple sells hardware and they definitely make a sizable profit from it, but I guess we're going to have to see what OpenAI is able to