Insider claims Google dodged AI breakthrough to shield ads, warns LLM sector faces brutal shakeout.

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“Yesterday an insider told me Google had the opportunity to launch an LLM model like ChatGPT well before OpenAI did, as DeepMind had been working on AI for years. Then, why did they decide not to do it? Because it would have cannibalized Google Ads revenues and made Google Search engine obsolete in the same way Search made Yahoo and other search engines popular during the DotCom obsolete while requiring a much higher operating cost due to the technology available at that time.

The same insider told me to think about search engines from a mathematical vector perspective, Yahoo was the first linear dimension, then Search made it 2D, LLMs are simply search engines in 3D that can provide a straight answer without pointing to a link where the user can find information itself but still needs to digest it

Many advertising companies are already shifting from SEO (search engine optimization) to AIEO to help their clients show up as “sources” in LLM model answers and drive back traffic to their websites. Some LLM companies are already working to skew AI LLM answers towards paying advertisers’ content since paying subscribers cannot cover the cost of running and developing LLMs.

This will drive consolidation in the sector with those companies owning social media platforms having a huge advantage since they have access to data competitors don’t from the open internet in order to build larger and more granular datasets. Those companies that have to rely on public content will simply burn all their capital till that is exhausted.

He also added the industry suffered a huge blow from DeepSeek because it showed all the previous LLMs were just an ensemble of inefficient “spaghetti coding” and internet brute force scrapping that needed a huge amount of computing power to run and are now working tirelessly to make their algorithms to train and run AI much leaner to cut computing power costs significantly.

According to him, the whole sector is on borrowed time since real revenues available from advertisers and subscribers is a limited and shrinking pot due to the economy forcing to cut spending on both retail and company front, only those with other cash-generating businesses will be able to get through the incoming carnage and make the whole business profitable at the end of the crisis

Large tech companies are already starting to make many developers redundant and to optimise the infrastructure they already acquired that is far more than the one needed differently from the first estimates run years ago. He said there will be a big reckoning moment at some point as soon as it is clear revenue growth and overall potential are structurally limited

Hope this summary will be helpful”