Here’s what most people don’t understand about business cases – the company with the better product doesn’t always win. I’ve spent over 15 years preparing companies for investment rounds, watching some pull in $40m+ while others crash and burn with superior technology. The difference? Strategy over innovation. Let’s talk about the perfect business case study – Google vs OpenAI.
OpenAI built something remarkable with GPT. No debate there. I was an early adopter and still pop in occasionally. But here’s what shifted my entire perspective on AI models lately – the pricing model, or lack thereof.
I’ll use GPT for quick searches or random questions, like checking if some small town’s water supply is safe. OpenAI’s banking on this behavior. They’re thinking, “He’ll use it enough times that eventually, he’ll upgrade to premium.”
That’s when Google made their move. They looked at OpenAI’s playbook and wrote down exactly what they saw: “They need users hooked, then monetized.” Google’s response? A textbook example of how to beat a competitor without having the best product.
Business Case Study: The Payment Advantage
This business case study reveals two critical elements in the sentence above – usage and payment. Google knew that all they needed to do was push GPT into the payment zone, where payment determines the choice for the user – then the ball is in Google’s court.
The AI Cashflow Bankruptcy Problem
Every single prompt costs these companies money. GPT has enough, but they keep raising more to survive. Most of them do – Claude, Perplexity, etc. They all generate revenue but not enough to sustain them as a business.
Most of our clients working on AI projects have a core problem of the AI freemium model. This creates a black hole that keeps sucking money until hopefully, the market shifts. Even if it does shift, the unit economics don’t make sense. Most of those companies need a decent number of paying users to be able to make a profitable business.
Think of these AI companies like gyms offering unlimited free trials. The gym looks packed, everyone’s working out, but almost nobody’s actually paying membership fees. Sure, a few dedicated fitness enthusiasts pay up, but the vast majority? They’re just there for the free weights and treadmills before they bounce.
Now the difference between Google and OpenAI is that Google owns the entire building. They’ve been collecting rent from shops, billboards, and parking fees for years. Gemini is just another amenity in their complex. You want to use it? Great. You want to stick with Search? Also great – they’ll still make money from you clicking on ads.
That’s the genius move. Google can afford to run this gym forever. OpenAI? They’re burning through their funding just to keep the lights on.
Business Case Study: Competing on Usage
Google needed to reach the level of usage of GPT. Now, I’m being entirely honest with you, and you should with yourself at this stage – GPT vs Gemini vs Claude vs DeepSeek is like comparing red apples to red apples in most cases.
According to OpenAI – Three-quarters of conversations focus on practical guidance, seeking information, and writing—with writing being the most common work task, while coding and self-expression remain niche activities. Two-thirds of all writing messages asked the chatbot to perform editing, critiquing and translating for existing text.
They have 700 million weekly active users. So hundreds of millions of users are asking GPT – “translate this” or “make this better”.
Run the same prompt through GPT, Gemini, Claude, or DeepSeek – the available AI will all give you acceptable outputs. Also, they’re all free (and that’s important.)
So in order for a business to capture the majority of users, it just needs to compete with these everyday AI tasks. Google went on a code red and eventually released Gemini which handles it quite well.
For those mid-range tasks, like coding, having tested many of those models, I prefer Claude, but in this particular case, I am not the mass of people. So I expect distribution amongst all models in this area.
So in terms of usage, Google played it well and became a contender. That’s already a catastrophic sign for GPT, and I’ve mentioned this in an article that I’ve written two years ago. If they reached this level, then GPT is already hanging by a thread. Why? Because payment is Google’s strongest asset.
The Strategical Winner of This Business Case Study
Now Google will release a new Gemini. OpenAI will release a new GPT. But that won’t change the user’s behavior in asking for a message for a new tinder match.
The available AI will all work – so whoever does the job cheap, fast, and good enough wins the round.