The Prague Post - In just one year, Google turns AI setbacks into dominance

"The market had written off Alphabet in the AI race," Matt Britzman, analyst at Hargreaves Lansdown, said of Google's parent company. "That was short-sighted."

In March 2023, Google hastily launched its version of ChatGPT, called Bard, four months after the original shook the world.

During its launch event, Bard made an error answering a question about the James Webb telescope, drawing ridicule from viewers tuning in from around the world.

Several analysts subsequently downgraded their recommendations of Alphabet, worried that ChatGPT would eat into the Google search engine's generation-long dominance of the internet.

A year later, in May 2024, the Mountain View, California giant unveiled AI Overviews, a feature integrated into Google Search that again caused online ridicule after recommending a glue pizza recipe and eating a rock a day in answers to queries.

Despite massive investments in AI technology for over a decade -- acquiring the DeepMind lab in 2014 and producing high-level research publications that inspired the ChatGPT phenomenon -- Google kept stumbling.

Much of Google's AI development "focused on powering its platforms rather than delivering services directly to consumers," said Ben Wood, an analyst at CCS Insight.

Ted Mortonson, an analyst at financial services firm Baird, said Google leadership was caught "flat-footed" and had grown "too complacent" about their AI advantage.

- Turnaround trajectory -

Amid the crisis, change was afoot. Google co-founder Sergey Brin was seen back at the Googleplex, and the company undertook a drastic internal reorganization.

In spring 2024, AI developers were consolidated under a single Google DeepMind banner with Nobel Prize winner Demis Hassabis put in charge.

"It took us time to bring these teams together," CEO Sundar Pichai explained on the "Lex Fridman Podcast" in early June.

Google also needed time to deploy its new in-house AI chips, the TPUs (Tensor processing units), essential to the company's ambitions.

But "I could see, internally, the trajectory we were on," he said.

Despite the "glue pizza" missteps, or hallucinations in AI parlance, Overviews marked the first step in Google's turnaround.

Next came the commercial launch of NotebookLM -- a digital document tool that can synthesize uploaded content into easy-to-understand writing or even a chatty podcast.

At Google's developer conference in May 2025, the company unveiled video generation tool Veo 3, whose precision and consistency made a big splash, along with AI Mode, a feature that completed the transformation of search engine into ChatGPT-style chatbot.

August brought a new version of the Pixel smartphone, whose AI enables 100x zoom and real-time translation. Mid-September saw the launch of video generation on YouTube.

"Today's tools, especially from Google, can be used in the real world, as opposed to just being developer conference demos," emphasized Avi Greengart of Techsponential.

With Pixel, "Google is in pole position in AI equipment," said Wood.

Google drove the point home with its image editing program integrated into Gemini, informally called Nano Banana, which became such a sensation that Gemini topped ChatGPT in iPhone downloads for the first time earlier this month.

The outlook brightened further for Google when it avoided having to sell its Chrome browser -- a government demand in its search monopoly trial that was rejected by a federal judge in early September.

Signaling the shift, Apple is reportedly considering using Gemini for its overhaul of AI voice assistant Siri, according to Bloomberg.

A partnership with the iPhone giant would hand Google a new revenue stream, though monetizing its AI "is still somewhat of a question mark," said Greengart.

"Google is playing the long game," said Wood. "It knows that right now, it needs to offer free services to get consumers engaged with Gemini. However, in the longer term, it's hoping this can be turned into a substantial revenue stream."

K.Pokorny--TPP