You’ve heard the pitch by now. Sundar Pichai, Demis Hassabis, a dozen VPs: Google doesn’t need to be the best language model. They own the distribution, the cloud, the TPUs, the data. They can win the AI era without holding the LLM crown. It sounds humble. Strategic. Even wise.
But here’s the thing they’re not telling you: The crown isn’t a trophy. It’s the keys to the kingdom. And the moment Google decides it’s okay to let someone else wear it, they’re not being strategic—they’re handing over the keys and hoping the door stays unlocked.
Let me tell you what I saw at a closed-door AI summit last month. A senior Google engineer stood up and said, ‘We’re not chasing benchmarks. We’re chasing utility.’ The room nodded. Then a small startup CTO in the back raised his hand and asked: ‘If you’re not chasing benchmarks, who sets the price of your API in two years?’ The engineer didn’t have an answer. Nobody did.
This is the tension that the top comment on the original Semafor article nailed: ‘It’s far better to have the LLM crown because the crown is what will give you the highest margins.’ That comment isn’t just an opinion—it’s a brutal market truth. The frontier model leader doesn’t just get prestige. They get pricing power. They attract the top talent. They control developer mindshare. They capture the fattest part of the AI value chain. Google, by treating the crown as optional, is betting that being a distribution pipe above someone else’s monopoly is just as profitable. History says otherwise.
You probably remember when Microsoft let Apple define the smartphone. When BlackBerry let iPhone define the touch screen. When IBM let Microsoft define the PC operating system. In each case, the ‘ecosystem’ player thought they could win without owning the crown. In each case, they ended up commoditized. If you don’t own the crown, you don’t own the margin. You become a toll road on someone else’s highway.
Now, I’m not saying Google is doomed. They have incredible assets. But the moment they normalize ‘not needing to be the best,’ they give permission for their best people to leave. They give permission for developers to build on OpenAI or Anthropic. They give permission for the market to decide that Google’s AI is ‘good enough’—and ‘good enough’ is the death of premium pricing.
Here’s the twist nobody wants to talk about: Google’s strategy is actually a bet on its own failure. By refusing to compete for the crown, they’re ceding the thing that makes the ecosystem valuable in the first place—the perception of being the leader. And in AI, perception is reality. The moment the market believes you’re not the best, you stop being the default. And once you lose default, you lose everything.
So the next time you hear a Google executive say they don’t need the LLM crown, ask yourself: Are they telling you the truth? Or are they telling you the story they need to believe to sleep at night? The crown is not a burden. It’s the only thing that keeps you from becoming a commodity. And in the AI war, the graveyard is full of companies that thought they could win without it.
FAQ
Q: What question would a skeptic ask?
A: Isn't Google's ecosystem so strong that they can still make billions even if they aren't the best model? Yes, but those billions will be lower-margin and more vulnerable to a single point of failure—the company that controls the frontier model can raise prices at any time.
Q: What's the practical implication?
A: If you're building on Google's AI stack, you're betting that they'll remain competitive. If they cede the crown, expect API prices to stay low (good for you) but innovation to slow (bad for you). For investors, it means Google's AI margins will compress over time.
Q: What's the contrarian take?
A: Google's bet is that the future of AI is commoditized models with value in the application layer. That could be right—just like nobody cares who makes the CPU in their phone. But Google is betting against the entire history of platform shifts, where the crown always mattered.