Venture capitalist Chamath Palihapitiya 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.

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Incumbents Capturing OpenAI’s Market Share?

In a recent analysis posted on X, Palihapitiya broke down new market data, concluding that Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Gemini “has a huge runway ahead of itself as their models and services become better.”

His argument centers on a “Generative AI Traffic Share” chart from Similarweb, which he labels “Chart 1: Distribution Matters.” The data shows that while OpenAI is “still the clear leader,” its commanding percentage share has been steadily eroding over the last 12 months as the overall market grows.

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.

Google’s Gemini Increases Its Market Share Over 12 Months

In the chart, Gemini’s traffic share (represented by a red bar) has expanded from ...