<div id="readability-page-1"><div><div><p>Venture capitalist <strong>Chamath Palihapitiya</strong> declared that the generative AI race will ultimately be won by established tech incumbents, not new startups, citing their “massive distribution” as the decisive factor.</p><p>Check out GOOG’s stock price here.</p><h2><strong>Incumbents Capturing OpenAI’s Market Share?</strong></h2><p>In a recent analysis posted on X, Palihapitiya broke down new market data, concluding that <strong>Alphabet Inc.</strong>‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Gemini “has a huge runway ahead of itself as their models and services become better.”</p><p>His argument centers on a “Generative AI Traffic Share” chart from Similarweb, which he labels “Chart 1: Distribution Matters.” The data shows that while <strong>OpenAI </strong>is “still the clear leader,” its commanding percentage share has been steadily eroding over the last 12 months as the overall market grows.</p><p>Palihapitiya finds it “curious who they are losing share to.” He points out that the beneficiaries are not “other startups but incumbents.” Google’s Gemini visibly demonstrates this trend.</p><h2><strong>Google’s Gemini Increases Its Market Share Over 12 Months</strong></h2><p>In the chart, Gemini’s traffic share (represented by a red bar) has expanded from a razor-thin slice 12 months ago to a much more significant portion of the market today.</p><p>This growth supports Palihapitiya’s thesis that Google is successfully leveraging its existing ecosystem—from search to Android—to push its AI models to billions of users, a distribution network startups cannot match.</p><h2><strong>Meta Is Also Poised To Surge Because Of Its Massive Reach</strong></h2><p>This distribution advantage isn’t limited to Google. Palihapitiya identified <strong>Meta Platforms Inc. </strong>(NASDAQ:META) as another incumbent poised to surge.</p><p>He stated that “when/if Meta gets their act together, they will be able to gain share quickly” by integrating their AI models across their massive social media platforms.</p><p>This analysis suggests that while startups like OpenAI created the category, the long-term battle will be fought over distribution channels. Palihapitiya concluded it “likely means that xAI will need to license Grok aggressively OR acquire existing distribution for their models” to remain viable against the entrenched tech giants.</p><h2><strong>Alphabet’s 33% YTD Gain: A Testament Of Its Dominance?</strong></h2><p>Alphabet’s Class shares ended 0.76% higher at $253.79 per share on Friday. The stock has gained 33.13% year-to-date and 53.07% over the year.</p><p>As per Benzinga Pro, GOOG’s market capitalization stood at $3.08 trillion, whereas META enjoyed a m-cap of $1.80 trillion. </p><p><strong>Benzinga Edge Stock Rankings </strong>show that GOOG maintains a strong price trend over the short, medium, and long terms, with robust growth and quality scores. Additional information is available here.</p><ul> <li><strong>SPAC King Chamath Palihapitiya Hails Rare Earth Play MP Materials As Stock Nears $100: One Of The Deals ‘That Worked’</strong></li> </ul><p><em><strong>Disclaimer:</strong> This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.</em></p><p><em>Photo: Kathy Hutchins on Shutterstock.com</em></p></div></div></div>

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<p>Venture capitalist Chamath Palihapitiya believes established tech giants like Google will dominate the generative AI race due to their extensive distribution networks. He noted that Google's Gemini has significantly increased its market share over the past year, while OpenAI's share has declined. Palihapitiya also highlighted Meta as another incumbent with potential for growth. He concluded that the competition will focus on distribution channels, suggesting that startups may need to license or acquire distribution to compete effectively. Alphabet's stock has gained 33% year-to-date, reflecting its market strength.</p>

- Venture capitalist Chamath Palihapitiya argues that established tech companies will dominate the generative AI market due to their extensive distribution networks.  
- He highlights that while OpenAI remains a leader, its market share is declining, with Google’s Gemini and Meta Platforms gaining traction.  
- Palihapitiya concludes that startups must either license their technology or acquire distribution channels to compete effectively against these incumbents.

Chamath Palihapitiya Sees Current Tech Giants Having An Upper Hand In AI Wars: 'Google Has A Huge Runway'