Solving The Money Problem on $GOOGL (Nov 7, 2026)
Google's large incoming compute capacity is an advantage: it could devote it to Gemini, letting Gemini close the quality gap with leading foundation models, because restricting rivals' compute raises their costs and degrades their user experience, giving others time to catch up.
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I think this benefits hyperscalers because they already have capabilities in place . I think this is very bad for new clouds because they are tenants, and it's very bad for core models because they are severely lacking in these capabilities and need them to grow.
Therefore, to the extent that these leading models are far superior to anyone else’s products, they are the ones who need these capabilities. This puts large-scale companies in a " kingmaker" position, and they now have an interesting game theory .
Can you explain which companies are large-scale so that people can understand the difference between them? Yes. Amazon, Meta, Microsoft, Google, SpaceX .
You can decide to utilize all the additional computing capabilities to support your own products. Therefore, Google has a huge amount of capacity that will enter the service. They could say, "I'll dedicate it to Gemini."
What will happen then? This will actually allow Gemini to catch up in terms of quality compared to the foundational models. Why ? Because if you restrict the amount of assets that can generate computing power, and less space becomes available to leading companies, those companies will have to pay more, the user experience will suffer , and other products will have time to catch up.