"Code red" feels like theater. Competition is healthy - Google's compute advantage was always going to matter once they got serious. The real question isn't who's ahead this quarter, but whether anyone can maintain a moat when the underlying tech is rapidly commoditizing.

"Who is ahead this quarter" is pretty much all that the market and finance types care about. Maybe "who will be ahead next year" as a stretch. Nobody looks beyond a few quarters. Given how heavily AI is currently driven by (and driving!) the investment space, it's not surprising that they'll find themselves yanked around by extremely short term thinking.

Yeah, but now it's questionable whether the insane investments will ever pay off.

It feels like (to me) that Google's TPU advantage (speculation is Meta is buying a bunch) will be one of the last things to be commoditized, which gives them a larger moat. Normal chips are hard enough to come by for this stuff.

It was always clear that the insane technological monopoly of Google would always eventually allow them to surpass OpenAI once they stopped messing around and built a real product. It seems this is that moment. There is no healthy competition here because the two are not even remotely on the same footing.

"Code red" sounds about right. I don't see any way they can catch up. Their engineers at the moment (since many of the good researchers left) are not good enough to overcome the tech advantage. The piling debts of OpenAI just make it all worse.

Declaring a “code red” seems to be a direct result of strong competition?

Sure, from an outsider’s perspective, competition is fine.