Starting from the 1970s, Microsoft built an entire system from end to end-the chips,
the servers, the software and the hardware. With over 90% market share in the 1990s
and still over 70% today, Windows is the operating system for powering the world’s
PCs and our digital lives. Though Microsoft has faced severe antitrust scrutiny for
leveraging its Windows OS dominance to stifle competition, notably by
bundling Internet Explorer, leading to landmark cases in the US and EU, it is still the
market leader. However, though Microsoft owned the Operating Systems, it still
needed OEMs to ship them initially, though now the dependence is gone. Learning
from Microsoft, Apple built the entire experience end-to-end.
Today the AI Race, between Open AI, Google and Microsoft is similar- it is a fierce
competition for dominance, with Open AI leading frontier model innovation
(GPT-5), Microsoft excelling at enterprise integration (Co-pilot in M365), and
Google rapidly advancing with Gemini and Workspace; they’re vying for user
adoption, enterprise workflows, and defining the next AI-driven internet, but it’s also
shifting into regulatory battles (Open AI vs. Big Tech in EU) and complex cloud
dynamics, with Open AI even using Google/Oracle for cloud, complicating
Microsoft’s role as a partner and potential rival. OpenAI has the early mover
advantage; ChatGPT is a daily digital habit of many executives in crafting their
corporate communications. But OpenAI is only a part of the value chain- however, it
has tied up with AMD to buy AI GPUs and also tied up with Broadcom to co-develop
AI accelerators and systems. Basically, OpenAI is hedging against dependence on
NVIDIA and trying to develop a full value chain for AI- a tightly integrated system
where custom silicon, software models and a signature hardware device work in
alignment, though that hardware device is yet to come to market. That would make
OpenAI close to winning the AI race.
At present, the software battle between OpenAI and Google is fierce. While Chat GPT
still holds a big lead with more than 800 million weekly users, Google’s Gemini is
gaining fast: As per data, the Gemini app now has 650 million monthly active users,
up from 450 million in July. Preliminary November data reveal Gemini
generated 1.351 billion website visits—a 14.3% increase from October 2025.
Meanwhile, Chat GPT fell below the 6 billion benchmark it had touched in October
2025, recording 5.844 billion visits. OpenAI unleashed the first element of its
counterattack in mid-December, with the release of GPT 5.2, internally code-named
Garlic. The model puts OpenAI back on top of many closely watched benchmarks for
AI performance. Then, on December 16, OpenAI launched a new image generation
model designed to show it can match the buzz created by Google’s Nano Banana.
But even the company acknowledges that these are merely initial moves in what
needs to be a much broader effort to regain momentum. A major product
upgradation is on the cards to shore up the core ChatGPT product and the AI models that underpin it. What may have truly shaken them is the performance of Gemini 3,
the newest version of Google’s flagship AI model and the model powering Nano
Banana Pro. From the impressive answers it delivers to complex business questions
to its writing and coding capabilities, Gemini 3 has very quickly earned praise from
experts and the general public.
All said and done, the next 2 years are OpenAI’s proving ground- developing
infrastructure beyond NVIDIA, launching hardware beyond imagination and deepening
its developer ecosystem before competitors catch up. Then we would have an end-to
end AI device. And maybe not from OpenAI alone, but from other companies also.
Indian Chamber of Commerce