Nov 02, 2025·8 min
How Google Powered GPT but Let OpenAI Win the AI Race
Explore how Google created the Transformer tech behind GPT yet allowed OpenAI to capture the generative AI spotlight, and what this means for innovators.
Explore how Google created the Transformer tech behind GPT yet allowed OpenAI to capture the generative AI spotlight, and what this means for innovators.
Google didn’t “miss” AI so much as invent a big part of what made the current wave possible—and then let someone else turn it into the defining product.
Google researchers created the Transformer architecture, the core idea behind GPT models. That 2017 paper, “Attention Is All You Need,” showed how to train very large models that understand and generate language with remarkable fluency. Without that work, GPT as we know it would not exist.
OpenAI’s achievement was not a magical new algorithm. It was a set of strategic choices: scale Transformers far beyond what most thought practical, pair them with enormous training runs, and package the result as easy-to-use APIs and, eventually, ChatGPT—a consumer product that made AI feel tangible to hundreds of millions of people.
This article is about those choices and tradeoffs, not secret drama or personal heroes and villains. It traces how Google’s research culture and business model led it to favor BERT-like models and incremental search improvements, while OpenAI pursued a much riskier bet on general-purpose generative systems.
We’ll walk through:
If you care about AI strategy—how research turns into products, and products into enduring advantage—this story is a case study in what matters more than having the best paper: having the clearest bets and the courage to ship.
Google entered modern machine learning with two huge structural advantages: data at unimaginable scale and an engineering culture already optimized for large distributed systems. When it turned that machinery toward AI, it quickly became the gravitational center of the field.
Google Brain started as a side project around 2011–2012, led by Jeff Dean, Andrew Ng, and Greg Corrado. The team focused on large‑scale deep learning, using Google’s data centers to train models that were simply out of reach for most universities.
DeepMind joined in 2014 through a high‑profile acquisition. While Google Brain lived closer to products and infrastructure, DeepMind leaned into long‑horizon research: reinforcement learning, games, and general‑purpose learning systems.
Together, they gave Google an unparalleled AI engine room: one group embedded in Google’s production stack, the other pursuing moonshot research.
Several public milestones cemented Google’s status:
These victories convinced many researchers that if you wanted to work on the most ambitious AI problems, you went to Google or DeepMind.
Google concentrated an extraordinary share of the world’s AI talent. Turing Award winners like Geoffrey Hinton and senior figures such as Jeff Dean, Ilya Sutskever (before he left for OpenAI), Quoc Le, Oriol Vinyals, Demis Hassabis, and David Silver worked within a few orgs and buildings.
This density created powerful feedback loops:
That combination of elite talent and heavy infrastructure investment made Google the place where frontier AI research often originated.
Google’s AI culture leaned heavily toward publishing and platform building over polished consumer AI products.
On the research side, the norm was to:
On the engineering side, Google poured resources into infrastructure:
These choices were highly aligned with Google’s core businesses. Better models and tooling directly improved Search relevance, ad targeting, and content recommendations. AI was treated as a general capability layer rather than a standalone product category.
The result was a company that dominated the science and plumbing of AI, integrated it deeply into existing services, and broadcast its progress through influential research—while remaining cautious about building new, consumer‑facing AI experiences as products in their own right.
In 2017, a small Google Brain and Google Research team quietly published a paper that rewired the entire field: “Attention Is All You Need” by Ashish Vaswani, Noam Shazeer, Niki Parmar, Jakob Uszkoreit, Llion Jones, Aidan Gomez, Łukasz Kaiser, and Illia Polosukhin.
The core idea was simple but radical: you could throw away recurrence and convolutions, and build sequence models using only attention. That architecture was named the Transformer.
Before Transformers, state-of-the-art language systems were based on RNNs and LSTMs. They had two major problems:
The Transformer solved both:
Position information is added via positional encodings, so the model knows order without needing recurrence.
Because all operations are parallelizable and based on dense matrix multiplications, Transformers scale cleanly with more data and compute. That scaling property is exactly what GPT, Gemini, and other frontier models rely on.
The same attention machinery also generalizes beyond text: you can apply Transformers to image patches, audio frames, video tokens, and more. That made the architecture a natural foundation for multimodal models that read, see, and listen with a unified backbone.
Crucially, Google published the paper openly and (via follow‑on work and libraries like Tensor2Tensor) made the architecture easy to reproduce. Researchers and startups worldwide could read the details, copy the design, and scale it up.
OpenAI did exactly that. GPT‑1 is, architecturally, a Transformer decoder stack with a language-modeling objective. The direct technical ancestor of GPT is Google’s Transformer: same core self-attention blocks, same positional encodings, same bet on scale — just applied in a different product and organizational context.
When OpenAI launched GPT, it wasn’t inventing a new paradigm from scratch. It was taking Google’s Transformer blueprint and pushing it further than most research groups were willing—or able—to go.
The original GPT (2018) was essentially a Transformer decoder trained on a simple objective: predict the next token in long stretches of text. That idea traces directly back to Google’s 2017 Transformer architecture, but where Google focused on translation benchmarks, OpenAI treated “next-word prediction at scale” as the foundation for a general-purpose text generator.
GPT-2 (2019) scaled the same recipe to 1.5B parameters and a far larger web corpus. GPT-3 (2020) jumped to 175B parameters, trained on trillions of tokens using massive GPU clusters. GPT-4 extended the pattern again: more parameters, more data, better curation, and more compute, wrapped in safety layers and RLHF to shape behavior into something conversational and useful.
Throughout this progression, the algorithmic core stayed close to Google’s Transformer: self-attention blocks, positional encodings, and stacked layers. The leap was in sheer scale and relentless engineering.
Where Google’s early language models (like BERT) targeted understanding tasks—classification, search ranking, question answering—OpenAI optimized for open-ended generation and dialogue. Google published state-of-the-art models and moved on to the next paper. OpenAI turned a single idea into a product pipeline.
Open research from Google, DeepMind, and academic labs fed directly into GPT: Transformer variants, optimization tricks, learning-rate schedules, scaling laws, and better tokenization. OpenAI absorbed these public results, then invested heavily in proprietary training runs and infrastructure.
The intellectual spark—Transformers—came from Google. The decision to bet the company on scaling that idea, shipping an API, and then a consumer chat product was OpenAI’s.
Google’s early commercial success with deep learning came from making its core money-printing machine—search and ads—smarter. That context shaped how it evaluated new architectures like the Transformer. Instead of racing to build free‑form text generators, Google doubled down on models that made ranking, relevance, and quality better. BERT was the perfect fit.
BERT (Bidirectional Encoder Representations from Transformers) is an encoder‑only model trained with masked language modeling: parts of a sentence are hidden, and the model must infer the missing tokens using the full context on both sides.
That training objective aligned almost perfectly with Google’s problems:
Critically, encoder‑style models fit neatly into Google’s existing retrieval and ranking stack. They could be called as relevance signals alongside hundreds of other features, improving search without rewriting the whole product.
Google needs answers that are reliable, traceable, and monetizable:
BERT improved all three without disturbing the proven search UI or ads model. GPT‑style autoregressive generators, by contrast, offered less obvious incremental value to the existing business.
Free‑form generation raised sharp internal concerns:
Most internal use cases that passed policy review were assistive and constrained: auto‑completion in Gmail, smart replies, translation, and ranking boosts. Encoder‑style models were easier to bound, monitor, and justify than a general conversational system answering anything from health advice to politics.
Even when Google had working chat and generative prototypes, a core question stayed unresolved: Would great direct answers reduce search queries and ad clicks?
A chat experience that gives you a full answer in one shot changes user behavior:
Leadership’s instinct was to integrate AI as an enhancer of search, not a replacement. That meant ranking tweaks, rich snippets, and gradually more semantic understanding—exactly where BERT excelled—rather than a bold, standalone conversational product that might disrupt the core business model.
Individually, each decision was rational:
Collectively, they meant Google under-invested in productizing GPT‑style, autoregressive generation for the public. Research teams explored large decoder models and dialog systems, but product teams had weak incentives to ship a chatbot that:
OpenAI, without a search empire to protect, made the opposite bet: that a highly capable, openly accessible chat interface—even with imperfections—would create new demand at massive scale. Google’s focus on BERT and search alignment delayed its move into consumer‑facing generative tools, setting the stage for ChatGPT to define the category first.
OpenAI started in 2015 as a non‑profit research lab, funded by a handful of tech founders who saw AI as both an opportunity and a risk. For the first few years, it looked similar to Google Brain or DeepMind: publish papers, release code, push the science forward.
By 2019, the leadership realized that frontier models would demand billions of dollars in compute and engineering. A pure non‑profit would struggle to raise that kind of capital. The answer was a structural innovation: OpenAI LP, a “capped‑profit” company sitting under the non‑profit.
Investors could now earn a return (up to a cap), while the board kept an explicit mission focus on broadly beneficial AGI. That structure made it possible to sign very large financing and cloud compute deals without turning into a conventional startup.
Where many labs optimized for clever architectures or highly specialized systems, OpenAI made a blunt bet: extremely large, general‑purpose language models might be surprisingly capable if you just keep scaling data, parameters, and compute.
GPT‑1, GPT‑2, and GPT‑3 followed a simple formula: mostly standard Transformer architecture, but bigger, trained longer, and on more diverse text. Instead of tailoring models for each task, they leaned into “one big model, many uses” via prompting and fine‑tuning.
This was not just a research stance. It was a business strategy: if one API could power thousands of use cases—from copywriting tools to coding assistants—OpenAI could become a platform, not just a research lab.
The GPT‑3 API, launched in 2020, made that strategy concrete. Rather than shipping heavy on‑premise software or tightly scoped enterprise products, OpenAI exposed a simple cloud API:
This “API‑first” approach let startups and enterprises handle UX, compliance, and domain expertise, while OpenAI focused on training ever‑larger models and improving alignment.
The API also created a clear revenue engine very early. Instead of waiting for perfect, fully‑featured products, OpenAI let the ecosystem discover use cases and effectively do product R&D on its behalf.
OpenAI consistently chose to ship before the models were polished. GPT‑2 launched with safety concerns and a staged release; GPT‑3 entered the world through a controlled beta with obvious flaws—hallucinations, bias, inconsistency.
The clearest expression of this philosophy was ChatGPT in late 2022. It was not the most advanced model OpenAI had, nor was it particularly refined. But it offered:
Instead of tuning the model endlessly in private, OpenAI treated the public as an enormous feedback engine. Guardrails, moderation, and UX evolved week by week, driven directly by observed behavior.
OpenAI’s bet on scale required enormous compute budgets. That is where the Microsoft partnership was decisive.
Starting in 2019 and deepening over the following years, Microsoft provided:
For OpenAI, this solved a core constraint: they could scale training runs on dedicated AI supercomputers without building or financing their own cloud.
For Microsoft, it was a way to differentiate Azure and infuse AI into Office, GitHub, Windows, and Bing far faster than building everything in‑house.
All of these choices—scale, API‑first, consumer chat, and the Microsoft deal—fed into a reinforcing loop:
Instead of optimizing for perfect research papers or cautious internal pilots, OpenAI optimized for this compounding loop. Scale was not just about bigger models; it was about scaling users, data, and cash flow fast enough to keep pushing the frontier.
When OpenAI launched ChatGPT on November 30, 2022, it looked like a low-key research preview: a simple chat box, no paywall, and a short blog post. Within five days, it crossed a million users. Within weeks, screenshots and use cases filled Twitter, TikTok, and LinkedIn. People were writing essays, debugging code, drafting legal emails, and brainstorming business ideas with a single tool.
The product wasn’t presented as “a demo of a Transformer-based large language model.” It was just: Ask anything. Get an answer. That clarity made the technology instantly legible to non-experts.
Inside Google, the reaction was closer to alarm than admiration. Leadership declared a “code red.” Larry Page and Sergey Brin were pulled back into product and strategy discussions. Teams that had worked on conversational models for years suddenly found themselves under intense scrutiny.
Engineers knew that Google had systems roughly comparable to ChatGPT’s underlying capabilities. Models like LaMDA, PaLM, and earlier Meena already demonstrated fluent conversation and reasoning on internal benchmarks. But they lived behind gated tools, safety reviews, and complex internal approvals.
Externally, it looked like Google had been blindsided.
At a technical level, ChatGPT and Google’s LaMDA were cousins: large Transformer-based language models fine-tuned for dialogue. The gap was not primarily in model architecture; it was in product decisions.
OpenAI:
Google:
Under pressure to show a response, Google announced Bard in February 2023. The preview demo tried to mirror ChatGPT’s conversational magic: ask Bard a question, see a clever answer.
But one of the flagship answers — about discoveries from the James Webb Space Telescope — was wrong. The error slipped into Google’s own marketing material, was spotted within minutes, and wiped billions off Alphabet’s market cap in a day. It reinforced a brutal narrative: Google was late, nervous, and sloppy, while OpenAI looked confident and prepared.
The irony was painful for Googlers. Hallucinations and factual mistakes were well-known issues with large language models. The difference was that OpenAI had already normalized this in users’ minds with clear UI cues, disclaimers, and an experimentation framing. Google, by contrast, wrapped Bard’s debut in polished, high-stakes branding — and then stumbled on a basic fact.
ChatGPT’s edge over Google’s internal systems was never just a bigger model or a more novel algorithm. It was speed of execution and clarity of experience.
OpenAI:
Google moved slower, optimized for zero mistakes, and framed Bard as a glossy launch rather than a learning phase. By the time Bard reached users, ChatGPT had already become a daily habit for students, knowledge workers, and developers.
The shock inside Google was not just that OpenAI had good AI. It was that a much smaller organization had taken ideas Google helped invent, packaged them into a product ordinary people loved, and redefined the public perception of who led AI — all in a matter of weeks.
Google and OpenAI started from similar technical foundations but very different organizational realities. That difference shaped almost every decision around GPT-style systems.
Google’s core business is search and ads. That engine throws off enormous, predictable cash, and most senior incentives are tied to protecting it.
Launching a powerful conversational model that might:
was naturally viewed as a threat. The default was caution. Any new AI product had to prove it wouldn’t hurt search or brand safety.
OpenAI, by contrast, had no cash cow. Its incentive was existential: ship valuable models, win developer mindshare, sign big compute deals, and turn research into revenue before others did. Risk of not launching outweighed risk of launching too early.
Google had lived through antitrust scrutiny, privacy fights, and global regulation. That history created a culture where:
OpenAI accepted that powerful models would be messy in public. The company emphasized iteration with guardrails over long internal perfection cycles. It was still cautious, but the tolerance for product risk was far higher.
At Google, big launches typically pass through multiple committees, cross-org sign-offs, and complex OKR negotiations. That slows any product that cuts across Search, Ads, Cloud, and Android.
OpenAI concentrated power in a small leadership group and a focused product team. Decisions about ChatGPT, pricing, and API direction could be made quickly, then adjusted based on real usage.
For years, Google’s edge rested on publishing the best papers and training the strongest models. But once others could replicate the research, the advantage moved to research plus:
OpenAI treated models as a product substrate: ship an API, ship a chat interface, learn from users, then feed that back into the next model generation.
Google, by contrast, spent years keeping its most capable systems as internal tools or narrow demos. By the time it tried to productize them at scale, OpenAI had already created habits, expectations, and an ecosystem around GPT.
The gap was less about who understood transformers better, and more about who was willing—and structurally able—to turn that understanding into products in front of hundreds of millions of people.
On the technical side, Google never stopped being a powerhouse. It led on infrastructure: custom TPUs, advanced datacenter networking, and internal tooling that made training massive models routine years before most companies could even attempt it.
Google researchers pushed the frontier on model architectures (Transformers, attention variants, mixture-of-experts, retrieval-augmented models), scaling laws, and training efficiency. Many of the key papers that defined modern large-scale ML came from Google or DeepMind.
But much of this innovation stayed inside docs, internal platforms, and narrowly scoped features in Search, Ads, and Workspace. Instead of one clear “AI product,” users saw dozens of small, disconnected enhancements.
OpenAI took a different path. Technically, it built on ideas others had published, including Google’s. Its advantage was turning those ideas into a single, clear product line:
This unified packaging turned raw model capability into something people could adopt overnight. While Google shipped powerful models under multiple brands and surfaces, OpenAI concentrated attention on a small number of names and flows.
Once ChatGPT took off, OpenAI gained something Google had previously owned: default mindshare. Developers experimented on OpenAI by default, wrote tutorials against its API, and pitched investors on products “built on GPT.”
The underlying model quality gap—if any—mattered less than the distribution gap. Google’s technical edge in infrastructure and research did not automatically translate into market leadership.
The lesson: winning the science is not enough. Without a clear product, pricing, story, and path to integration, even the strongest research engine can be outpaced by a focused product company.
When ChatGPT exposed how far behind Google looked in product execution, the company triggered a very public “code red.” What followed was an accelerated, sometimes messy, but genuine reset of Google’s AI strategy.
Google’s first answer was Bard, a chat interface built on LaMDA and then upgraded to PaLM 2. Bard felt rushed and cautious at the same time: limited access, slow rollout, and clear product constraints.
The real reset arrived with Gemini:
This shift repositioned Google from “search company experimenting with chatbots” to “AI-first platform with a flagship model family,” even if that positioning lagged OpenAI’s head start.
Google’s strength is distribution, so the reset focused on integrating Gemini everywhere users already are:
The strategy: if OpenAI wins on “newness” and brand, Google can still win on default presence and tight integration with daily workflows.
As Google widened access, it leaned heavily on its AI Principles and safety posture:
The tradeoff: stronger guardrails and slower experimentation versus OpenAI’s faster iteration and occasional public missteps.
On pure model quality, Gemini Advanced and the top-tier Gemini models appear competitive with GPT-4 on many benchmarks and developer reports. In some multimodal and coding tasks, Gemini even leads; in others, GPT-4 (and successors) still set the bar.
Where Google still trails is mindshare and ecosystem:
Google’s counterweight is massive distribution (Search, Android, Chrome, Workspace) and deep infra. If it can convert those into delightful, AI-native experiences faster, it can narrow or even reverse the perception gap.
The reset is happening in a field that is no longer just Google vs OpenAI:
Google’s late but serious reset means it is no longer “missing” the generative AI moment. But the future looks multipolar: no single winner, and no single company controlling the direction of model or product innovation.
For builders, that means designing strategies that assume several strong providers, powerful open models, and constant leapfrogging—rather than betting everything on a single AI stack or brand.
Google proved that you can invent the breakthrough and still lose the first major wave of value. For builders, the point is not to admire that paradox, but to avoid reenacting it.
Treat every major research result as a product hypothesis, not an endpoint.
If a result is important enough to publish, it is important enough to prototype for customers.
People do what they are rewarded for.
Transformers were a new computing primitive. Google treated them mainly as an internal infrastructure upgrade and a paper; OpenAI treated them as a product engine.
When you land on a similarly deep idea:
Brand and safety concerns are valid, but using them to justify endless delay is not.
Create a tiered risk model:
Instead of waiting for certainty, design for controlled exposure: progressive rollout, strong logging, quick revert paths, red-teaming, and public communication that you are still learning.
Google enabled others to build GPT-style systems by open-sourcing ideas and tooling, then largely watched from the sidelines as others built the iconic experiences.
When you expose a powerful new capability:
You cannot depend on one visionary exec or one heroic team.
Bake the transition into how the company works:
The biggest miss at Google was not failing to foresee AI; it was underestimating what its own inventions could become in consumers’ hands.
For founders, PMs, and execs, the practical mindset is:
Future breakthroughs—whether in models, interfaces, or entirely new computing primitives—will be commercialized by teams that are willing to move from “we discovered this” to “we are fully accountable for shipping this” very quickly.
The lesson from Google is not to publish less or to hide research. It is to pair world-class discovery with equally ambitious product ownership, clear incentives, and a bias to learn in public. The organizations that do that will own the next wave, not just write the paper that starts it.
Not exactly, but Google invented the core technology that made GPT possible.
So Google built much of the intellectual and infrastructure foundation. OpenAI won the first big wave of value by turning that foundation into a mainstream product (ChatGPT and APIs).
Google focused on research, infrastructure, and incremental search improvements, while OpenAI focused on shipping one bold, general-purpose product.
Key differences:
BERT and GPT both use Transformers but are optimized for different jobs:
Google saw free-form generation as risky and hard to monetize within its core model.
Main concerns:
OpenAI made three big bets and executed consistently:
It pushed standard Transformers to extreme scale (data, parameters, compute), leaning on scaling laws rather than constantly changing architectures.
Not really. The main shock was product and narrative, not raw model capability.
This flipped public perception: from “Google leads AI” to “ChatGPT and OpenAI define AI.” Google’s real miss was underestimating how powerful its own inventions could be in a .
ChatGPT’s edge came from execution and framing rather than unique algorithms.
Key elements:
For most builders, the story highlights how to turn deep tech into durable advantage:
You can make the “Google mistake” at any scale if you:
To avoid that:
Google is still a technical powerhouse and has reset aggressively with Gemini:
Where Google still lags is:
Technically, Google wasn’t behind; organizationally and product-wise, it moved slower where it mattered for public perception and adoption.
BERT (Google):
GPT (OpenAI):
Google optimized for making search smarter; OpenAI optimized for making a flexible language engine people could talk to directly.
Given its size and regulatory exposure, Google defaulted to cautious integration of AI into existing products rather than launching a disruptive, standalone chatbot early.
API-first platform
It turned models into a simple cloud API early, letting thousands of others discover use cases and build businesses on top.
Consumer chat as the flagship product
ChatGPT made AI legible to everyone: “ask anything, get an answer.” It didn’t wait for perfection; it launched, learned from users, and iterated fast.
These moves created a reinforcing loop of users → data → revenue → bigger models → better products, which outpaced Google’s slower, more fragmented productization.
Google’s Bard launch, by contrast, was:
The difference wasn’t that Google couldn’t build ChatGPT; it’s that OpenAI actually shipped it and learned in public.
The core lesson: technical leadership without product ownership is fragile. Someone else can—and will—turn your ideas into the defining product if you don’t.
You don’t have to be as big as Google to get stuck; you just have to let structure and fear outrun curiosity and speed.
The likely future is multipolar: several strong closed providers (Google, OpenAI, others) plus fast-evolving open-source models. Google hasn’t “lost AI”; it missed the first generative wave, then pivoted. The race is now about execution speed, ecosystem depth, and integration into real workflows, not just who wrote which paper first.