Google, Nvidia, and OpenAI – Stratechery by Ben Thompson

Summary

A common explanation as to why Star Wars was such a hit, and continues to resonate nearly half a century on from its release, is that it is a nearly perfect representation of the hero’s journey. You have Luke, bored on Tatooine, called to adventure by a mysterious message borne by R2-D2, that he initially refuses; a mentor in Obi-Wan Kenobi leads him across the threshold of leaving Tatooine and facing tests while finding new enemies and allies. He enters the cave — the Death Star — escapes after the ordeal of Obi-Wan’s death, and carries the battle station’s plans to the rebels while preparing for the road back to the Death Star. He trusts the force in his final test and returns transformed. And, when you zoom out to the entire original trilogy, it’s simply an expanded version of the story: this time, however, the ordeal is the entire second movie: the Empire Strikes Back. The heroes of the AI story over the last three years have been two companies: OpenAI and Nvidia. The first is a startup called, with the release of ChatGPT, to be the next great consumer tech company; the other was best known as a gaming chip company characterized by boom-and-bust cycles driven by their visionary and endlessly optimistic founder, transformed into the most essential infrastructure provider for the AI revolution. Over the last two weeks, however, both have entered the cave and are facing their greatest ordeal: the Google empire is very much striking back. Google Strikes Back The first Google blow was Gemini 3, which scored better than OpenAI’s state of the art model on a host of benchmarks (even if actual real-world usage was a bit more uneven). Gemini 3’s biggest advantage is its sheer size and the vast amount of compute that went into creating it; this is notable because OpenAI has had difficulty creating the next generation of models beyond the GPT-4 level of size and complexity. What has carried the company is a genuine breakthrough in reasoning that produces better results in m...