Alphabet can breathe a big sigh of relief.
In the long-awaited “remedies” ruling in a closely watched antitrust case that began in 2020, U.S. District Court Judge Amit Mehta ruled that the Google parent would not have to spin off key assets like Chrome as punishment for monopolistic search practices.
Yes, Alphabet will have to abide by some potential new uncomfortable rulings. For example, it can no longer pay oodles of cash to be Apple’s iPhone exclusive search browser. But the spin-off of Chrome, the world’s most widely used browser, was the most problematic prospect for the company, and now that’s off the table.
Mehta’s reasoning is instructive: Generative AI, he noted, has changed the search landscape, and while Google is still the strongest contender in that space, it now has more fast-growing rivals. From the decision:
"Today, tens of millions of people use gen AI chatbots, like ChatGPT, Perplexity, and Claude, to gather information that they previously sought through internet search. These gen AI chatbots are not yet close to replacing GSEs [general search engines], but the industry expects that developers will continue to add features to gen AI products to perform more like GSEs. The emergence of gen AI changed the course of this case."
For years, the innovator’s dilemma at Google has been analyzed by media and investors, including here at Fortune. Its ad business is currently so reliant on its GSE that the company has seemingly been in no hurry to disrupt the search model with less ad-intuitive chatbots.
That doesn’t mean Google hasn’t been technologically capable, however—and could potentially even be waiting for the right moment to strike. After all, it acquired DeepMind, the initial AI industry leader, all the way back in 2014, a move that prompted Elon Musk and Sam Altman to join forces and launch a rival, OpenAI.
And because Google has been so dominant in search for so long—it still has almost 90% of global search market share—it is effectively sitting on far more data than any AI competitor. That gives it a huge advantage in building LLMs and AI assistants, like its own Gemini (which is easily accessible to anybody who uses Google Search the old-fashioned way).
If I were Alphabet CEO Sundar Pichai, I would have been tempted not to show what I could really do until this antitrust verdict came down. Maybe we’ll see Google really step on the gen AI gas now, and learn what’s been up its sleeve.
For more on what the antitrust ruling means for Google and its AI search competition, check out Fortune AI Editor Jeremy Kahn’s expert take here.
