Wouldn't Google be better able to integrate ads into a "ChatGoogle" service than OpenAI is into ChatGPT?
Especially because the people who'd pay for Premium tend to be the most prized people from an advertiser perspective.
And most people won't pay, under any circumstances, but they will click on ads which make Google money.
But then why did Microsoft put its money behind it? Alphabet's revenue is around $300bn, and Microsoft's is around $210bn which is lower but it is the same order of magnitude.
Advertisers are willing to pay far more than $20/mo per user, combined with the fact that search costs way less per query than inference.