Watch the Video
I pointed out that OpenAI is still the market leader in AI chatbots, but leadership alone is no longer the story. Lee and I agreed that momentum has clearly shifted over the past year, and investors should pay attention to the direction rather than the headline position.
Market share momentum changes
Lee walked through the data that caught our attention. ChatGPT’s share dropped from about 87% to roughly 72% in just twelve months. Over the same period, Gemini climbed from the mid-teens to more than 18%. In a market this young, that kind of swing is significant and signals intensifying competition.
Distribution outweighs product quality
I argued that the core issue is not which model is marginally better. It is distribution. Gemini is everywhere inside Google’s ecosystem. It appears naturally in search results, Chrome, Gmail, and Docs, which dramatically lowers friction for users. ChatGPT, by contrast, requires users to seek it out deliberately.
Lee agreed that this structural advantage explains much of Gemini’s rapid adoption. Platforms win, even when technology gaps are narrow.
Valuation risk for OpenAI
We then turned to OpenAI’s $500 billion private valuation. Lee noted that OpenAI is valued like one of the world’s largest companies despite never producing consistent profits. That raises the real possibility of a down round if future fundraising reflects slower growth or rising competition.
I added that OpenAI has yet to present a detailed, investor-grade monetization roadmap. Targets like breakeven by 2030 are not substitutes for clear pricing, revenue, and cost projections.
Why public-market investors feel better
We closed by noting how this shift changes the AI narrative for public investors. A year ago, AI looked like a threat to companies such as Alphabet, Meta, and Amazon. Today, it increasingly looks like an advantage for firms that already control massive distribution channels.
Transcript:
[00:00:04] Lee Jackson: So Lee OpenAI, in terms of the nose count of people who use their chat product is still in the lead, but they’ve lost a lot of share.
[00:00:15] Doug McIntyre: I understand that there’s, they’re still on the majority of the industry, but a lot of people said that the Gemini three product was better than what Open AI had. And you suddenly saw this ramp of adoption, I mean, a real, real ramp.
[00:00:34] Lee Jackson: Yeah. It has jumped. Yeah. Absolutely. This time a year ago, we were going through the numbers recently and, ChatGPT was clearly the leader, and that was just a year ago.
[00:00:47] And now it’s to come to a, and I’m gonna go to the figures right now. Okay. ChatGPT, a year ago had 87% of the business, that number has dropped to 72%. Gemini three a year ago had 13.7. That has jumped to 18.2%, and that’s it. That’s a strong move.
[00:01:10] Doug McIntyre: Well, they also have the Google platform, where Gemini is sort of, when you do a search
[00:01:15] Lee Jackson: Well, it’s ubiquitous on there. Yeah. it’s ubiquitous on, on Google.
[00:01:19] Doug McIntyre: So, so my point is, I would rather be the guy who’s got that massive Google platform to market Gemini and listen. They market Gemini for, For all this other stuff, using it in Gmail and Docs. I mean, it’s also using as glue to hold together all the Google products.
[00:01:39] I can see it on my screen right now. Yeah. I’m not in love with the fact that OpenAI doesn’t have a real means for distribution. I understand there’s demand, but they don’t have a long-term platform that people use over and over again, that’s gonna get them distribution.
[00:01:58] Lee Jackson: Not like Alphabet has No, not like, ’cause literally it’s on everything they have.
[00:02:03] I mean, literally I am on their, Chrome platform, it’s right there. I can see it. It’s right there. We’re asked to get to, for to see open AI and have to literally go down, scroll down, click on it. So, yeah, that’s a huge advantage. And also, I think just from a a bigger 30,000 foot view. OpenAI at 500 billion is like the 21st largest company in the world. They’ve never made a dime, never.
[00:02:40] Doug McIntyre: Right. And so, you and I know this term, maybe not everybody here does, but there’s something called a down round in, in venture capital. And what that is that okay, I have a company valued at $500 billion, and that’s based on the last money that was put in.
[00:02:57] It was valued. Right? Right.
[00:02:58] Lee Jackson: Last private round. Right? Right.
[00:02:59] Doug McIntyre: Now everybody assumes that each round will go up until something goes public. I’m gonna predict you that OpenAI has what’s called a down round, which means the next time they raise money, it’s not gonna be at 500, it’s gonna be at something like 450.
[00:03:16] And I say that for two reasons. The first one is the market share that you’re talking about, right? Yeah, absolutely. And the other one is, the other thing that you said, and that is, is that they, they have never made a case. They’ve never stood up in an auditorium with a PowerPoint presentation and said, Hey, here’s how we’re gonna make money.
[00:03:36] Here’s each year between, they say they’ll break even in 2030. Here’s each year and here’s what we’re gonna market each year, and here’s what we’re gonna charge for what we market each year, and here are our costs each year. How much of that have you seen? Zero.
[00:03:54] Lee Jackson: I don’t really under, it’s funny when I saw these statistics today and they’re based on like a, we’re, basically looking at just a trailing 36 month time because that’s when ChatGPT came out three years ago and they just dominated initially.
[00:04:12] But bigger players with deeper pockets have come in real fast and Musk’s Grok has, is very highly ranked and has done well and taken a ton. But you know, another thing when you’re on, when you’re on X, there it is. It’s my point, right? Easy access when you’re scrolling through X and looking at people complaining about the world.
[00:04:33] Doug McIntyre: Means of distribution.
[00:04:35] Google has it. Musk has it with X. There’s no analog, there’s nothing like that at all that open AI has. So, no, again, as hard as he wants
[00:04:47] Lee Jackson: Again, and it’s so expensive, and, they, just got paid, they got the final payment from the SoftBank, right? It wasn’t that this week.
[00:04:57] 40 billion. 40 billion. And it’s like you sold your Nvidia (NASDAQ: NVDA) | NVDA Price Prediction for that? I don’t know if that’s that smart, but I could be wrong, But, it’ll be interesting to see if this, and we’re gonna have to watch this, Doug, is if this trend keeps up, what if they continue to lose market share to Gemini?
[00:05:20] Doug McIntyre: Well, if I’m an investor, I used to say to myself, if I’m, like, if I’m Google, Amazon, Facebook.
[00:05:29] I’m saying to myself, okay, how bad does it get? Alright. If I’m an investor looking, because OpenAI is doing so well, I’m now saying how good is it gonna get for me? Because now as a public, a tech stock owner in something like Alphabet, I’m now looking at this as a positive.
[00:05:49] I’m looking at
[00:05:50] AI as a positive.
[00:05:51] A year ago, AI to me was a negative. Not that it wasn’t gonna work, but my company, my alphabet, my Amazon, my Meta. I didn’t have a piece of the action. Yeah. So I had to sweat as a shareholder. Yeah. It’s now, it’s flipped.
[00:06:07] Lee Jackson: They think they’re gonna try to take it public in the next, 12 to 18 months and it’ll be a huge deal.
[00:06:14] And it’s gonna be like, okay, at some point you’re gonna have to have at least a pro forma sort of, projection to what you’re gonna earn something. But, this could get dicey for them real fast. And there’s the thing that there’s so much money is poured into it. It’s like, how do you monetize that in any sort of quick fashion to get paid back?
[00:06:38] Doug McIntyre: Well, one of the. Upcoming segment here. We will talk a little about AI data centers and why they’re not gonna grow as fast as people think they are, or that places like, Google and open AI hope they will. But it may be that over time, certainly for the next two or three years, the limits for AI have nothing to do with the science of AI.
[00:07:01] They have to do with the infrastructure of AI.
[00:07:03] Lee Jackson: Right, exactly. And it’s funny there, I bet there is at this moment, literally millions of engineers, people working on new apps and I’m, literally, I’m seeing business people saying like, look, we’re gonna have 10% less people working here in, in a year. and they’re saying that across the board, so, so it’s kinda like, remember when all those pipeline guys get booted from the keystone four or five years ago and the administration was learn to code. Well, okay, I don’t think pipeline guys learn to code, but I, hopefully they’re building the pipeline again.
[00:07:43] But what are all these people gonna do that are, because they must be pretty simplistic jobs that, and I hate to say it, but maybe more blue collarish jobs, that can be handled by automation and robots and AI and entry level secretaries may be necessary, but I doubt it, not when the AI can do everything.
[00:08:06] Doug McIntyre: Bernie Sanders asks some of the people at CNN in an interview. He says, well, Musk says that people won’t have to work at all anymore in 20 years. And, Bernie Sanders said, well, how are they gonna get healthcare? And the problem is, that’s sort of true. Yeah. It sort of is. How are people gonna live if AI basically vacuums up all the jobs.
[00:08:32] Lee Jackson: it’ll be interesting. And again, new, industries create new jobs and we all know that. And, it happened when the car came and the buggy was gone and all that, but it, won’t be instantaneous and we will probably start losing jobs long before new ones are created.
[00:08:48] Yes.
Top Gaining Stocks
Top Losing Stocks