{"id":879837,"date":"2025-12-23T00:11:35","date_gmt":"2025-12-23T06:11:35","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/12\/23\/how-the-openai-vs-google-battle-looks-through-the-lens-of-michael-porters-5-forces-analysis\/"},"modified":"2025-12-23T00:11:35","modified_gmt":"2025-12-23T06:11:35","slug":"how-the-openai-vs-google-battle-looks-through-the-lens-of-michael-porters-5-forces-analysis","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/12\/23\/how-the-openai-vs-google-battle-looks-through-the-lens-of-michael-porters-5-forces-analysis\/","title":{"rendered":"How the OpenAI vs Google battle looks through the lens of Michael Porter\u2019s \u20185 Forces\u2019 analysis"},"content":{"rendered":"
\n

The sudden shift in the industry\u2019s landscape got me thinking about a classic tool for understanding any industry. Harvard Business School professor Michael Porter created the \u201cFive Forces\u201d framework in 1979, and it still stands as a brilliant way to grasp a given industry\u2019s big picture. Note that it\u2019s a way to characterize an industry<\/em>, not an individual company<\/em>.\u00a0<\/p>\n

So, for example, the first force, \u201cthreat of new entrants,\u201d means, \u201cIs this an industry in which new entrant companies could easily compete, or not?\u201d If the answer is, \u201cThis force is weak,\u201d it would mean there is little threat of new entrants coming into that industry, which would be good news for incumbents. We asked expert analysts Charlie Dai of Forrester and Arun Chandrasekaran of Gartner<\/a> and our own Fortune<\/em> AI experts for context about how each force might affect Google Gemini and OpenAI.<\/p>\n

Force One: Threat of new entrants. <\/strong>Chandrasekaran sees the industry becoming \u201ca three-horse race\u201d with OpenAI, Google, and Anthropic; he can\u2019t see how a new company could \u201cbe on a par with these three.\u201d Dai sees formidable barriers to new entrants in \u201ccompute cost, talent scarcity, and regulatory complexity.\u201d Conclusion: This force is weak which bodes well for the incumbents. Google may be better positioned than OpenAI given how much more of the AI value chain it controls.<\/p>\n

Force Two: Bargaining power of suppliers. <\/strong>Dai says suppliers of chips hold strong power because only a few companies, especially Nvidia<\/a>, AMD, and Huawei<\/a>, design the best chips and can\u2019t supply them fast enough. The picture here is similar to the vast amounts of AI cloud capacity that AI providers must buy or build. Chandrasekaran notes that the major LLM companies train their models by crawling the internet and scooping up data\u2014but some data providers are now demanding money. This force is strong. Google may be better protected by its control of its own chips, its own cloud, and nearly all its needed infrastructure.<\/p>\n

Force Three: Bargaining power of buyers. <\/strong>It\u2019s tempting to think that buyers aren\u2019t super-strong in bargaining because over time they\u2019ll get effectively locked into a provider\u2019s system. \u201cIf [OpenAI\u2019s] ChatGPT is integrated into your workflow and processes, extricating out of an application like ChatGPT is not really easy,\u201d Chandrasekaran says. But buyers are increasingly using multiple models and finding they can be compatible. This force is moderate to strong. Google has stronger structural lock-in, but OpenAI has more brand affinity from consumers.<\/p>\n

Force Four: Threat of substitutes. <\/strong>\u201cOpen-source alternatives like DeepSeek and Qwen will play a key role\u201d in the industry, Dai says. In addition, Chandrasekaran says, \u201cwe are starting to see smaller language models challenging the larger models in very specific domains.\u201d\u00a0 This force is medium and getting stronger. Google and OpenAI are about equally able to confront it.<\/p>\n

Force Five: Rivalry among existing firms.<\/strong> Our experts agree: This force is strong and getting much, much stronger. OpenAI and Google are in a virtual tie, though OpenAI has fewer defensive moats and must innovate quickly to retain its lead.<\/p>\n

\n

Bottom line: In what may be the most profoundly important industry yet seen, OpenAI has a fragile lead but faces an imposing foe that may benefit more as the Five Forces act on the sector. In five years, will one be the clear winner? Or will a Chinese competitor show that we grievously underestimated the \u201cthreat of new entrants\u201d?\u00a0Going through your industry\u2019s Five Forces framework can be a demanding exercise, but it\u2019s worthwhile for leaders in any industry. When done right, it will spark debates, insights\u2014and possibly even a code red.\u2014Geoff Colvin<\/em><\/p>\n

Contact CEO Daily via Diane Brady at di*********<\/span>@*****<\/span>ne.com<\/span><\/a><\/em><\/p>\n<\/div>\n

Top news<\/h3>\n

No refunds if Supreme Court strikes down tariffs, Hassett says<\/b><\/p>\n

In an interview on CBS News\u2019 Face the Nation on Sunday, National Economic Council Director Kevin Hassett predicted that the justices will rule in the White House\u2019s favor because refunding the companies that paid them would be \u201cvery complicated,\u201d Hassett says. Lower courts have ruled that the so-called reciprocal tariffs invoked under the International Emergency Economic Powers Act are illegal, though the Supreme Court will have a final say. \u201cAnd I also think that if they didn\u2019t find with us, that it\u2019s going to be pretty unlikely that they\u2019re going to call for widespread refunds, because it would be an administrative problem to get those refunds out there,\u201d <\/span>Hassett said<\/span><\/a>.<\/span><\/p>\n

Possible successor to GM\u2019s Barra is an old foe of Musk<\/b><\/p>\n

Sterling Anderson, 42, joined GM in June as its global product chief. He previously worked at Tesla but fell out with Elon Musk and was sued by Musk after he left, <\/span>the WSJ reports<\/span><\/a>. The robotics expert is a possible successor to CEO Mary Barra, 64, the paper says.<\/span><\/p>\n

Justice Department published, deleted, and then published again some of the Epstein files<\/b><\/p>\n

The Justice Department <\/span>released a portion of the Epstein files<\/span><\/a> on Friday and into Saturday, and some came with heavy redactions. At least 16 files then vanished from the DOJ\u2019s Epstein document webpage a day after they were posted on Friday. Among them was file 468, an image showing a drawer filled with photographs, including one with President Trump alongside Jeffrey Epstein, Melania Trump, and Epstein associate Ghislaine Maxwell. Another photograph in the drawer showed Trump surrounded by women. Deputy Attorney General Todd Blanche told NBC\u2019s Meet the Press on Sunday there were concerns that the photos inadvertently revealed the faces of victims, to the photos were retracted before being republished again. \u201cIt has nothing to do with President Donald Trump,\u201d <\/span>he said<\/span><\/a>.<\/span><\/p>\n

Contempt charges drafted for Bondi<\/b><\/p>\n

On Sunday, Rep. Thomas Massie (R-Ky.) and Rep. Ro Khanna (D-Calif.) told <\/span>Face the Nation<\/span><\/i>\u00a0that they are <\/span>drafting \u201cinherent contempt\u201d charges<\/span><\/a> against Attorney General Pam Bondi for every day that the entirety of the files aren\u2019t released.\u00a0<\/span><\/p>\n

Apollo preparing for \u2018when something bad happens\u2019<\/b><\/p>\n

Apollo Global\u2014$908 billion in assets under management\u2014is moving into cash, cutting its leverage, and derisking from certain parts of the debt market in preparation for \u201cwhen something bad happens,\u201d according to CEO Marc Rowan. He wants the company to be prepared to invest when the market goes through any upcoming turmoil, he said in private meetings at a Goldman Sachs conference, <\/span>according to the FT<\/span><\/a>.<\/span><\/p>\n

Economists say any Fed Chair will clash with Trump<\/b><\/p>\n

National Economic Council Director Kevin Hassett is the favorite on prediction market Kalshi to replace Jerome Powell as Fed Chair, but economists last week <\/span>argued<\/span><\/a> that any Fed chair will have trouble lowering rates as much as President Trump would like. Meanwhile, Hassett said over the weekend <\/span>that he believes the Supreme Court will find Trump\u2019s tariffs legal<\/span><\/a>, but tariff refund checks probably won\u2019t come even if they don\u2019t.<\/span><\/p>\n

AI not destroying finance jobs\u2014yet<\/b><\/p>\n

Experts told <\/span>Fortune<\/span><\/i> that AI isn\u2019t destroying finance jobs\u2014at least, for now. Although AI in theory can perform hours of junior-level analyst tasks in just seconds, experts agree that AI-related layoffs have been insignificant so far. \u201cIf there\u2019s a large company that might say, \u2018Well, we\u2019re not planning to hire as much because of AI,\u2019 or maybe \u2018We\u2019re letting people go because of AI,\u2019 I think there\u2019s a little bit of smoke and mirrors there,\u201d Robert Seamans, director of New York University Stern\u2019s Center for the Future of Management, tells <\/span>Fortune<\/span><\/i>.\u00a0<\/span><\/p>\n

SpaceX explosion endangered three jets<\/b><\/p>\n

The January 16 explosion of a SpaceX rocket over the Caribbean rained debris over a vast area of airspace for 50 minutes, <\/span>the WSJ reports<\/span><\/a>, endangering three passenger jets carrying 450 people. <\/span><\/p>\n

The markets<\/h3>\n

S&P 500 futures<\/b> are up 0.33% this morning. The last session closed up 0.88%. <\/span>STOXX Europe 600<\/b> was down 0.17% in early trading. The U.K.\u2019s <\/span>FTSE 100<\/b> was down 0.39% in early trading. Japan\u2019s <\/span>Nikkei 225 <\/b>was up 1.81%. China\u2019s <\/span>CSI 300<\/b> was up 0.95%. The South Korea<\/span> KOSPI<\/b> was up 2.12%. India\u2019s <\/span>NIFTY 50<\/b> was up 0.79%. <\/span>Bitcoin<\/b> was at $89K.<\/span><\/p>\n

Around the watercooler<\/h3>\n

Shield AI took its drones from the \u2018Batcave\u2019 to the battlefield. Now the $5.6 billion defense-tech startup\u2019s new CEO says it\u2019s at an inflection point<\/span><\/a> by Jessica Mathews<\/span><\/p>\n

Sam Altman says he\u2019s \u20180%\u2019 excited to be CEO of a public company as OpenAI drops hints about an IPO: \u2018In some ways I think it\u2019d be really annoying\u2019<\/span><\/a> by Sasha Rogelberg<\/span><\/p>\n

\u2018They\u2019ll lose their humanity\u2019: Dartmouth professor says he\u2019s surprised just how scared his Gen Z students are of AI<\/span><\/a> by Nick Lichtenberg<\/span><\/p>\n

Bill Gates identifies the biggest burden being passed on to his children after seeing his daughter harassed online<\/span><\/a> by Eleanor Pringle<\/span><\/p>\n

CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.<\/p>\n<\/div>\n

Read More<\/a>
\n Geoff Colvin<\/p>\n","protected":false},"excerpt":{"rendered":"

The sudden shift in the industry\u2019s landscape got me thinking about a classic tool for understanding any industry. Harvard Business School professor Michael Porter created the \u201cFive Forces\u201d framework in 1979, and it still stands as a brilliant way to grasp a given industry\u2019s big picture. Note that it\u2019s a way to characterize an industry<\/p>\n","protected":false},"author":1,"featured_media":879838,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[496,22088],"tags":[],"class_list":{"0":"post-879837","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-google","8":"category-openai"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/879837","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=879837"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/879837\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/879838"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=879837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=879837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=879837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}