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Comment by hypeatei | Hacker News Reader

I hold the exact same sentiment. The safest investment you can make in this AI race is Alphabet. The smaller players being wrapped up in this (CRWV, NOK, etc...) are going to get obliterated when the returns are not as good as previously thought. The bigger players will take a hit, but not as much as the small ones.

NVIDIA also seems like a risky bet given all the money they're passing around in circles to themselves via multi-billion dollar "investments"

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> The safest investment you can make in this AI race is Alphabet.

From the technical/talent/funding side, I agree with you. With Alphabet, the real risk is that they lose interest/focus and kill (or pivot) products early. I don't really see that happening in the short term (considering the hype/investments/cash around AI) but maybe in the medium to long term if things start to get stale.

Even with that risk though, I agree with you.

The chances of Alphabet losing interest in AI are vanishingly small. Google (pre-Alphabet remaming) was the AI company before AI companies were called that.

> Google (pre-Alphabet renaming) was the AI company before AI companies were called that.

I disagree. They're an advertising/attention company.

The jury's still out on whether their AI offerings will compliment their existing business or will cannibalize it. And in the case that it cannibalizes the advertising business, will they undermine/kneecap it to protect that cash cow?

It's been a while since they've been the "don't be evil" and "organizing the world's information"-mission Google.

A company can be multiple things. Just like Apple is a Phone, Tablet, & General Computing Company

Agreed, but there's no denying that selling advertising is Google/Alphabet's primary business. And it's not even close.

Its the majority of their revenue, but the share is shrinking

Revenue attributable to advertising:

Q1: 74.1%

Q2: 74.0%

Q3: 72.5%

They didn’t lose interest in messaging when they cycled through half a dozen different apps but the problem was they were building products they wanted to exist rather than what users wanted. I’d worry about AI getting similar churn if PMs make their name by launching a new product rather than improving an existing one.

That makes sense framing it as a skepticism about Google Gemini (a single product) rather than their interest in a category (AI).

I'm less worried about them genuinely losing interest then Google outlasting their AI competition and then kneecapping their AI product to protect their cash cow.

The root comment was investor-centric, i.e. if you want to divert some investment towards AI, Alphabet is a smart bet.

Investors got great returns as Google churned messaging platforms, and this will likely be the case ad Google churns through AI products, or even entire architectures.

We did get good returns but that was because other units did very well. It’s not a given but still too likely that they’d botch AI products but still be profitable due to ad sales continuing to grow. I do think AI has better than average chances, though, because it seems to have scared their senior management enough to do their jobs: from outside, everything appears to radiate “this can’t fail” in a way they haven’t had since the 2000s.

If you look back at the dot com era, hardware companies did survive but weren't the financial "winners". Cisco is an example and a good comparison is Amazon - their bread and butter now is ecommerce, they dominate it and that was borne out of that bubble.

Alphabet also has massive market share with YouTube, solid cloud offerings, Waymo which already has driverless/unsupervised robot taxis and their old standby search which is morphing more into more AI answers when you throw questions in your browser.

Alphabet's P/E ratio is lower than the S&P 500's. Some may argue the S&P is mostly being held up by Tech and AI related companies so stock in Alphabet could be seen as undervalued and NVDIA as overvalued.

Hardware almost always ends up getting commoditized so investing in hardware companies for the long haul does carry maybe more risk than mainly software companies.

Man I remember when IBM was the safe bet.

I remember when SCO had an all hands meeting that they evaluated that linux wasn't a threat because SCO was the safe choice, the big player in UNIX on commodity hardware.

I don't think tech works that way.

NVIDIA also seems like a risky bet because Google has their own chips R&D. It's not just another data center buying NVIDIA's GPUs. BTW Apple is following suit regarding chips, don't know if at some point Apple will offer any cloud service or continue to work on their ecosystem only.

Beyond that there are a lot of new chip companies attacking the market: https://news.ycombinator.com/item?id=45686790

While Google has their own chips, they don't really have the market power there to buy up bleeding-edge manufacturing capacity.

Apple on the other hand... (though they're behind in other regards)

But they were just an example. They are many players arising. You can look at this: https://news.ycombinator.com/item?id=45746246 even <https://www.nextsilicon.com/> is not on that list.

I don't see a natural monopoly anymore.

This makes sense to me. Where I work our ai team set up a couple h100 cards and are hosting a newer model that uses up around 80GB vram. You can see the gpu utilization on graphana go to like 80% for seconds as it processes a single request. That was very surprising to me. This is $30k worth of hardware that can support only a couple users and maybe only 1 if you have an agent going. Now, maybe we're doing something wrong, but it's hard to imagine anyone is going to make money on hosting billions of dollars of these cards when you're making $20 a month per card. I guess it depends on how active your users are. Hard to imagine anthropic is right side up here.

But was that with batching? It makes a big difference. You can run many requests in parallel on the same card if you're doing LLM inferencing.

It's not that easy. Tim is probably rubbing his hands until he can bring anthropic under the apple umbrella.

Might have missed the boat on that.

It’s everyone’s wet dream that Apple buys Anthropic, but I’m guessing their valuation now is already too high even for Apple. And why would Amazon let that happen?

It’s a solid match but not happening unless the AI market craters and Apple swoops in to buy them for vastly less.

> why would Amazon let that happen?

Google too. Google owns 14%.

I wouldn’t be surprised if Apple eventually decides that AI isn’t even a market worth existing in beyond some basic on-device tools.

They might say, have fun making single digit or negative profit margins on AI, we’ll sell subscriptions and iPhones and extended warranties.

All reports are that Apple isn’t really focusing on building their own server side models and is mostly just going to be a platform for other companies to fight over just like they said they don’t pay OpenAI anything for the current integration and Google pays them $20B+ a year to be the default search engine.

It makes no sense for Apple to waste money on having their own LLM when they are becoming commoditized - just chose the one that will give them the best deal.

I also think apple has put a lot of energy into providing on device hardware for this kind of stuff, like they have gone through a ton of iterations at this point on their own hardware that is also ai focused. so now they offer a lot of value in the mid to near future because if you can run ai on device why wouldn't you since you don't need to pay cloud costs anymore since users pay that for you by buying iphones.

So they’ll just die when Google has a seamless AI-first mobile experience where consumers just ask their Pixel to do X and it happens. Disruption comes for everyone, hardware isnt a moat

The issue is that Android won’t have an AI first experience where you depend on local inference because most Android phones being sold are cheap crappy devices and Android users don’t monetize.

But there is much more to a phone than “just doing stuff agentically”. Either way, you give way too much credit for Google to ever make a good end user product and be able to sell it. Google’s sells of pixels for a year are about the same number Apple sells in three weeks.

Apple’s hardware/ecosystem has been a most for 50 years.

Also Google is non existent in the country that has 1/5 of the worlds population.

Google broke my ability to set timers via voice (a core thing my phone used to do forever) for like a year. I no longer use that functionality on my phone (I can't trust Google not to break it, if it can't routinely work, it can't be part of my routine, and I personally don't enjoy cooking dinner twice after a long day).

Google replaced 'Google play the news' from playing news clips from sources I chose and trust, to an AI generated news feed that I have zero faith isn't hallucinated and from sources I have no idea about. Another multiple times daily function I used my phone for, broken by 'Google AI' because 'I should be happy with whatever they give me, it's a free product'.

Google's Youtube/Music algorithm punishes me if I flag AI slop in my feeds by removing those genres/topics, trying to force AI slop into my feed. This one I actually (well until it runs out the end of the month because I canceled) pay for.

Google has trained their users not to use Pixel's voice/AI capabilities, and to resent them (in the typical Google way, be damned with the old it's been replaced with our new half baked product that will itself be replaced shortly after the bugs are gone and it starts to work kind of OK (still really bad, but Google justifies bad is OK because it's 'FREE').

No one is integrating anything new from Google into their routine. No one is integrating Google's broken AI stuff into their daily routine, because it's friggen BROKEN. Google just one day removed me from setting voice timers with my phone, a core use case, for a year, because they could. My routine is not going back to using Google for things I count on just working because Google will arbitrarily break it and I will get the impact (maybe a burnt dinner, maybe faulty news reporting that causes me a heart attack, maybe who knows, maybe a missed important appointment tomorrow?).

Google doesn't care that I'm hit because 'it's good enough for a free product' to them. Everyone I know with a Pixel hates the ecosystem right now. Removing sideloading might fix that and improve good will I guess though? God Google doesn't know and hates their users/advocates/supporters. Google has moved themselves from 'a good solution' to 'good enough for a cheap device and free tools', and made damn sure I know it (via burnt dinners, having to move to my podcast app for (less current) news, by degrading my music/youtube feeds).

Google is a zombie company, they are dead, they just don't know it yet. Coming soon... Alphabet, a Bending Spoons company.

> Google is a zombie company, they are dead, they just don't know it yet. Coming soon... Alphabet, a Bending Spoons company

Google isn’t the next IBM. It’s the next Microsoft - boring, extremely profitable because of inertia. But crappy end user products.

apple is quite smart with this, there was a time when people thought they were dumb for not buying up tesla and ultimately shutting down their self driving division, but now it seems like a good bet.

There is literally 0 value in buying Anthropic when they can just sign a sweet deal to license Gemini (or some other model).

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