r/wallstreetbets
If LLM labs collapse (OpenAi/Anthropic) isn’t that bullish for Google?
Author argues Google's strong cash flow and diverse businesses make it a safe bet to survive even if AI startups fail.
- Google has massive free cash flow and profitable core businesses (Search, Ads, YouTube) to sustain AI investments.
- Google owns its data centers, avoiding the heavy compute costs that burden standalone LLM labs.
- Google holds a stake in Anthropic, positioning it to benefit if Anthropic becomes the prevailing LLM.
- AI models lack a strong moat due to intense competition from open-source models and other tech giants.
- If the AI bubble bursts due to poor ROI, it could negatively impact Google's overall tech valuation.
Forgive me if this is a stupid hypothetical that I hardly thought through but i’m just wondering?
So I listen to the AI bulls and the AI bears as well as everyone in between.
I have ZERO idea what is what - I just listen and read whatever I can and then try to stick to the facts.
I’m sure you all have heard of Ed Zitran he’s been calling the AI bubble for years and as of recently is become more and more popular even on mainstream news networks etc
Again, he’s not my ONLY source but he is A source.
To me it seems like the big question here is ROI on AI. According the Ed’s leaked financials of OpenAI it’s not looking too good for them as a company generating free cash flow. They’re highly unprofitable.
Seems like having an AI model isn’t really a moat, you have ChatGpt, Claude, Gemini, Microsoft has its own shit, Meta, open source models that are pretty good etc.
PERSONALLY, if AI/LLMs stopped all progress right here right NOW, I don’t see the technology going away. It’s here for good. Whether it’s a 5 trillion dollar technology or a 100 billion dollar technology is yet to be known.
OpenAI is reportedly delaying its IPO, I would imagine because the balance sheet is horrific.
Google has a stake in Anthropic similar to Microsofts stake in OpenAI.
If any LLM lab is going to prevail, i’d bet on Anthropic (which would be good for Google, right?)
If Anthropic AND OpenAI fail (being there is no real moat here and if AI isn’t as profitable as it needs to be for them to sustain their companies growth) that leaves a behemoth like Google who has massive cash flow, it’s own data centers (doesn’t have to buy compute from anyone like the LLM labs do), YouTube, Ad rev, Search and Gemini as well as quantum and waymo
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Wouldn’t that be a bull case for Google 1-5 years from now?
TLDR version: Google has its own cash flow and profitable businesses, it can survive (and maybe thrive) if AI isn’t as profitable as companies thought, thus being one of the last AI labs standing and adding a moat and new cash flow river in Gemini when/IF LLM labs collapse?
I.e if the AI labs fail and the “bubble” bursts - Google is still Google. Wouldn’t the LLM labs going bankrupt just strengthen Googles Gemini model as a moat being they have the compute AND the AI tech plus MASSIVE cash flow?