The Industry of the Future Is Run By People Who Hate Each Other

GOOGL faces a subtle but real strategic overhang: the AI narrative is shifting from “who has the best model” to “who is trusted to own the stack,” and fragmented industry politics make the trust premium harder to earn. That matters for Google because it is simultaneously one of the most visible AI incumbents and one of the easiest targets for a public that already associates AI with job displacement, energy use, and concentration of power. In the near term, that should keep the multiple ceiling lower than peers with cleaner “platform disrupter” branding, even if product execution remains strong.

The second-order risk is regulatory bundling. When industry leaders look factionalized and self-serving, it becomes easier for policymakers to justify ex ante constraints on compute, data center expansion, model deployment, or procurement. For GOOGL, that raises the probability that AI monetization becomes more capex-intensive and slower to translate into margin expansion, especially over a 6-18 month horizon when cloud and search reinvestment compete for capital. The market may be underestimating how much “governance theater” can morph into real operating friction.

Contrarian angle: the article is bearish on the sector’s social license, but that can paradoxically help the largest incumbents. If distrust suppresses new entrants and intensifies compute/regulatory barriers, Google’s distribution, balance sheet, and enterprise footprint become more valuable as a moat rather than a handicap. The key question is whether the market is pricing GOOGL as a beneficiary of AI scale or as a collateral victim of AI backlash; if it’s the latter, the downside may be exaggerated relative to earnings durability.