"Is 'AI replacing search' a false proposition? The market finds: Google is actually right!"

Artificial intelligence cannot replace search engines in the short term, and this industry consensus is profoundly altering the strategic logic of tech giants. Google, once considered conservative in its pace, now reveals a structural advantage with its "dual-track parallel" strategy: continuously optimizing its search business while independently developing AI conversational products like Gemini. In contrast, OpenAI, which has gone all-in on chatbots, faces a growth bottleneck caused by a disconnect between technological breakthroughs and real user needs.

According to The Information, OpenAI has recently found internally that although the company continues to make breakthroughs in core technologies like reasoning models, most users only use ChatGPT for simple queries, rather than for processing complex science or math problems at which it excels. Previously, CEO Sam Altman issued a “red alert” to the team, calling for a renewed focus on product appeal to mainstream users.

In contrast, Google CEO Sundar Pichai stated clearly in an analyst call this April that while some functions of Search and Gemini overlap, the two address "entirely different use cases," formally establishing the strategic route of developing Search and AI businesses in parallel. This strategy enables Google to rapidly follow market trends thanks to its existing distribution channels and infrastructure cost advantages.

The strategic differences are already directly reflected in growth data and capital market performance. Google is steadily expanding AI product coverage through its integration advantages, while OpenAI, despite surpassing $19 billion in annualized revenue, is still trailing its initial target of one billion users. Notably, OpenAI is now seeking a new round of financing at a $750 billion valuation, about 50% higher than two months ago.

OpenAI Faces a Mismatch Between Technology and Market Demand

The core dilemma for OpenAI is a clear disconnect between its R&D focus and mainstream user demand. This year, the company has devoted most efforts to developing "reasoning models," which perform excellently on complicated math and science problems, reaching gold medal levels at the International Mathematical Olympiad.

However, according to internal employees, most ChatGPT users do not utilize such complex reasoning capabilities. Peter Gostev, Head of AI Capabilities at LMArena, pointed out that ordinary users are more likely to ask about movie ratings or other simple queries, rather than needing a model that “thinks for half an hour.” Reasoning models often take several seconds or even minutes to generate answers, which is unfriendly compared to users accustomed to Google's second-scale search results.

OpenAI Head of Product Nick Turley likened ChatGPT’s current text-centered design to the MS-DOS OS of the 1980s, saying this limits users’ ability to discover other features. Head of Applications Fidji Simo also admitted that ChatGPT needs to move from a text dialogue interface to a more generative and intuitive user interface.

Google’s Strategic Foresight Validated

Google's policy of keeping search engines and AI chatbots separate is being justified in the market. When the industry collectively expected AI chatbots to replace traditional search, Google insisted the two serve different user needs.

The key to this judgment lies in differences in user behavior. When users need fast and simple answers, search engines are still the best option. AI chatbots, on the other hand, are better suited for handling complex problems that need deep analysis and reasoning. Amazon has adopted a similar strategy, keeping its shopping site's search engine separate from the Rufus AI chatbot.

According to The Information, Google’s AI models now rival ChatGPT's capabilities in image generation, code handling, and more. More importantly, Google owns powerful distribution channels such as Search, Chrome, and Gmail, plus cost efficiency from in-house AI chips—key components of its competitive moat.

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