Two Years

Two years into the generative AI boom, Stratechery’s analysis finds that AI has become the central force shaping the strategies of Big Tech. (Apple, Google, Meta, Microsoft, and Amazon). Each company is responding differently: Apple is leveraging its hardware ecosystem but lags in AI model innovation, relying on partnerships like OpenAI to stay relevant. Google, with deep AI infrastructure and research, faces uncertainty about whether AI will disrupt or sustain its core search business, as generative models threaten traditional search monetization. Meta is in a state of urgency after disappointing AI releases, with Zuckerberg aggressively recruiting top talent to regain momentum, though the company’s direction remains unclear.

Microsoft per the article stands out as particularly well-positioned, benefiting from its exclusive partnership with OpenAI and strong distribution through Azure, Windows, and Microsoft 365. This has allowed Microsoft to capitalize on both infrastructure and productivity software opportunities in AI. All the arguments are reasonable yet the using the Microsoft ecosystem as an end-user continues to the relentless struggle it always was. Things are meant to work together and they do but it takes a lot of effort and even greater patience. Something seems to fall apart. 

While its a good article overall, it does overstate the clarity of strategic outcomes, particularly regarding Google’s position: while it highlights the existential threat to search, it underplays Google’s early and deep investments in AI, which complicate the disruption narrative. The analysis of Meta’s struggles is detailed but leans heavily on anecdotal evidence and lacks a rigorous assessment of the company’s structural advantages, such as its data scale and social graph. Additionally, Amazon’s AI strategy is barely addressed, leaving a gap in the comparative analysis of the Big Five. Also its not helpful to frame the AI epoch in binary terms : sustaining vs. disruptive without fully acknowledging the spectrum of possible business model evolutions or the uneven pace of AI’s impact across sectors.