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Google: The AI Company

10/6/20254 hr 7 min

Google faces the greatest innovator's dilemma in history. They invented the Transformer — the breakthrough technology powering every modern AI system from ChatGPT to Claude (and, of course, Gemini). They employed nearly all the top AI talent: Ilya Sutskever, Geoff Hinton, Demis Hassabis, Dario Amodei — more or less everyone who leads modern AI worked at Google circa 2014. They built the best dedicated AI infrastructure (TPUs!) and deployed AI at massive scale years before anyone else. And yet... the launch of ChatGPT in November 2022 caught them completely flat-footed. How on earth did the greatest business in history wind up playing catch-up to a nonprofit-turned-startup?

Today we tell the complete story of Google's 20+ year AI journey: from their first tiny language model in 2001 through the creation Google Brain, the birth of the transformer, the talent exodus to OpenAI (sparked by Elon Musk's fury over Google’s DeepMind acquisition), and their current all-hands-on-deck response with Gemini. And oh yeah — a little business called Waymo that went from crazy moonshot idea to doing more rides than Lyft in San Francisco, potentially building another Google-sized business within Google. This is the story of how the world's greatest business faces its greatest test: can they disrupt themselves without losing their $140B annual profit-generating machine in Search?

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‍Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

Clips

Google’s Innovator’s Dilemma
Rosewood Dinner Births OpenAI
The Cat Paper Changes Everything
Google’s ‘Code Red’ After ChatGPT
DeepMind’s Four-Way Bidding War
Strapping Geoff Hinton to a Jet
Waymo’s 91% Crash Reduction

Transcript preview

First 90 seconds

  1. Ben Gilbert· Host0:00

    I went and looked at a studio, well, a little office that was gonna turn into a studio nearby, but it was not good at all. It had drop ceilings, so I could hear the guy in the office next to me. You would be able to hear him talking on episodes.

  2. David Rosenthal· Host0:11

    (laughs) Third co-host.

  3. Ben Gilbert· Host0:13

    Third co-host.

  4. David Rosenthal· Host0:15

    Is it Howard?

  5. Ben Gilbert· Host0:16

    No, it was, like, a lawyer, and it seemed to be, like, talking through some horrible problem that I didn't want to listen to- (laughs) ... but I could hear every word.

  6. David Rosenthal· Host0:22

    (laughs) Does he want millions of people listening to his conversation?

  7. Ben Gilbert· Host0:25

    Right. (laughs) Right.

  8. David Rosenthal· Host0:28

    All right.

  9. Ben Gilbert· Host0:28

    All right. Let's do a podcast.

  10. David Rosenthal· Host0:30

    Let's do a podcast.

  11. Speaker 2· Soundbite0:31

    (laughs) Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Hmm. Is it you? Is it you? Is it you? Sit me down. Say it straight. Another story on the way. Who got the truth?

  12. Ben Gilbert· Host0:49

    Welcome to the fall 2025 season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

  13. David Rosenthal· Host0:57

    I'm David Rosenthal.

  14. Ben Gilbert· Host0:58

    And we are your hosts. Here is a dilemma. Imagine you have a profitable business. You make giant margins on every single unit you sell, and the market you compete in is also giant, one of the largest in the world you might say. But then on top of that, lucky for you, you also are a monopoly in that giant market with 90% share and a lot of lock-in.

  15. David Rosenthal· Host1:23

    And when you say monopoly, monopoly as defined by the US government.

  16. Ben Gilbert· Host1:27

    That is correct. But then imagine this,

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