Unlike competitors feeling pressure to build proprietary AI foundation models, Apple can simply partner with providers like Google. This reveals Apple's true moat isn't the model itself but its massive hardware distribution network, giving it leverage to integrate best-in-class AI without the high cost of in-house development.

Bill Gurley argues that a sophisticated defensive move for giants like Amazon or Apple would be to collaboratively support a powerful open-source AI model. This counterintuitive strategy prevents a single competitor (like Microsoft/OpenAI) from gaining an insurmountable proprietary advantage that threatens their core businesses.

Google's strategy of integrating its AI, Gemini, directly into its widely-used Chrome browser gives it a massive distribution advantage over standalone tools like ChatGPT. By making AI a seamless part of the user's existing workflow, Google can make its tool the default choice, which marketers must optimize for.

Meta benefits from a "do nothing, win" position in consumer-facing AI. The company can avoid costly R&D for new social features, knowing that any successful AI-driven application developed by a competitor can be quickly replicated and scaled across its massive user base, similar to how it handled Stories.

Apple isn't trying to build the next frontier AI model. Instead, their strategy is to become the primary distribution channel by compressing and running competitors' state-of-the-art models directly on devices. This play leverages their hardware ecosystem to offer superior privacy and performance.

As consumers become wary of "AI," the winning strategy is integrating advanced capabilities into existing products seamlessly, like Google is doing with Gemini. The "AI" branding used for fundraising and recruiting will fade from consumer-facing marketing, making the technology feel like a natural product evolution.

Google's DNA is rooted in the high-margin search business. This cultural bias, combined with public market pressure, makes it difficult to pursue a long-term, zero-profit "bleed out" strategy for Gemini, even if it could secure a monopoly.

By integrating Google's Gemini directly into Siri, Apple poses a significant threat to OpenAI. The move isn't primarily to sell more iPhones, but to commoditize the AI layer and siphon off daily queries from the ChatGPT app. This default, native integration could erode OpenAI's mobile user base without Apple needing to build its own model.

Apple's historic commitment to user privacy prevented it from using the vast data pools competitors leveraged for AI. This created a technical disadvantage, forcing Apple to use its marketing prowess ('lipstick') to mask a technologically inferior AI product ('the pig').