Part of me thinks one of the big reasons Google has held back so much is because of ethical concerns and/or just general fear of not having complete knowledge of how AI (incomplete to boot) will impact the world. We know that Google has some extremely powerful AI, but they never let it out of the lab. Just the most heavily neutered and clamped versions to help accentuate their existing products.
Now it seems that Open.AI/Microsoft are ready to jump in, caution to the wind. As you would expect the chance for a competitive advantage will always overwhelm external concerns.
We'll see what Google does. They might say "fuck it" and finally give us a chance to play with whatever their top tier AI is. Or maybe they'll discredit it and try and compete with their current (ad optimized) search product. We'll see, but I am definitely curious to see how Google responds to all this.