Google's parent company, $Alphabet-A (GOOGL.US)$, is making significant strides in artificial intelligence, according to a top analyst.
What Happened: Gene Munster, a tech analyst at Deepwater Asset Management, shared his insights on Google's I/O 2024 keynote in a recent post on X. Munster highlighted three key takeaways from the event.
Firstly, Munster noted that Google is approximately six months behind OpenAI in terms of AI development, but is still about five years ahead of the rest of the industry. He observed that Google's AI progress is evident in its generative and agentic AI technologies.
He wrote, "They're about 6 months behind OpenAI and about 5 years ahead of everyone else."
Secondly, Munster pointed out that Google is set to roll out its AI, Gemini, across its entire product lineup, including Search, Photos, Workplace, Gmail, Android, and cameras. This move aligns with Google's 2017 declaration of becoming an AI-first company.
Lastly, Munster addressed the potential impact of generative search on Google's advertising business. He mentioned that Google is introducing AI Overview, a revamped version of the Search Generative Experience, to all U.S. Google Search users. Despite this significant rollout, Munster noted that Google has not provided specific details on how it plans to monetize this feature.
Three takeaways from the $GOOG I/O Keynote:
1) They're about 6 months behind OpenAI and about 5 years ahead of everyone else. What they showed today had all the markings of transformation but most were recorded demos versus OpenAI which showed live demos. The bottom line is...— Gene Munster (@munster_gene) May 14, 2024
Why It Matters: The I/O Keynote follows a series of significant developments at Google. Just a day before the I/O Keynote, Munster had predicted that OpenAI could pose a significant challenge to Google's search business. Despite this, the I/O Keynote suggests that Google is making substantial progress in the AI space, potentially strengthening its position against OpenAI.
Moreover, the I/O Keynote also aligns with the expectations of analysts like Justin Patterson who anticipated that the event would reinforce Alphabet's meaningful scale and create new monetization opportunities through AI innovations. The widespread rollout of Gemini and the AI Overview feature are in line with this expectation, indicating that Google is actively pursuing new monetization strategies.