AI Strategies of Apple, Google, and Amazon: What's Next in 2025

🚨Strategic Signal: Google Is Losing Search Traffic

A new section in our newsletter. What’s the strategic signal that got me thinking about this topic?

Last week, I read in the WSJ: “If Google were a ship, it would be the Titanic in the hours before it struck an iceberg—riding high, supposedly unsinkable, and about to encounter a force of nature that could make its name synonymous with catastrophe.”

It seems a bit dramatic. Reading this got me thinking about how Google and other tech giants approach AI, and I found intriguing differences.

Google Generative Push

Google: Puts AI in the Core of Everything

Earlier this year, we saw Google showcasing at Google I/O how it incorporates AI into every product it had: AI in Workspace, Photos, Search, Cloud, Gemini, and Project Astra, which kind of brings back Google Glass.

These integrations are contributing to how users interact with information on the Internet. For Google, it is undermining its search business, but it's a necessary gamble to stay relevant as users move to products like ChatGPT to get their answers. The only question we can’t find an answer for: Will Google’s gamble pay off?

The truth is that Search is a convenience—an easy way to find information that you are looking for on the Internet. And that can get replaced once an easier way comes along. So now the search is fragmenting, and people are starting NOT to think Google Search first anymore.

However, Google expects its AI investments to turn into revenue in the “fairly short term.” CEO Pichai told investors they are already seeing growth from its investments in AI.

Google parent Alphabet invested $13 billion in capital expenditures in Q3, and now that integrated AI features are gaining traction, it is planning to increase spending on AI even more in 2025.

Compared to the other two companies, Google is closest to OpenAI, positioning itself as a solution for direct use as well as a platform. With their AI, they want to address users, developers, and businesses. They also want to integrate AI with as many products as possible.

Google is doing well on providing the cloud infrastructure for fast-growing AI unicorns (startups that grow beyond $1 billion in valuation). This certainly is a way to win AI-related revenue as well.

Amazon AI is for Efficiency and Commerce

Amazon has a huge logistics business and is exploring any possible AI path to drive improvements in its logistics operation. In fact, it claims that it speeds up Supply Chain by 75% with the help of AI. It’s using a system called Sequoia to manage and store inventory. Amazon also rolled out other robotics systems like Agility, a robotic solution that helps with highly repetitive tasks like tote recycling.

You see, while we mostly look at Alexa and notice that it isn’t where it should be, Amazon builds the world’s best AI features into its warehouse management behind the scenes.

On the commerce and retail side, we know that Amazon is doing everything it can to promote the right products to customers through the Amazon website. But what’s really interesting, and I assume Amazon can build a lead in 2025, is further advancing its “Just Walk Out” stores. We took a closer look at a recent issue. (How Edge AI is Reshaping Retail). Amazon’s project of building fully autonomous retail stores.

💥BREAKING—during Tuesday's edit, Amazon AWS announced "Supercomputer," a new server powered by Amazon's homegrown AI Chips. This sounds like Amazon could be ready to offer an alternative to Nvidia.

The first users of these chips will be the models of AI startup Anthropic—an Amazon investment.

On top of that, AWS also announced Apple as one of its new chip customers.

So, in addition to the above, we see that Amazon’s AI strategy is much deeper and expands into hardware as well, and we will see how it takes off in 2025.

Apple’s AI - Late to the Party but Thoughtful

Over the last years, Apple has established itself as a company that takes customer privacy seriously. It makes no exception with AI. In fact, when Apple presented its AI approach, it highlighted that Apple’s version of AI would protect its users’ data.

For that reason, Apple creates its own chips to do most of the processing on the device and avoid being dependent on Nvidia like almost everyone else.

Of course, adding chips to the new generation of iPhones is a great reason for customers to feel the urge to upgrade not just for better cameras anymore.

One of the biggest features where Apple was seemingly falling behind was the off-screen experience with Siri. To catch up here, Apple decided to partner with OpenAI. Of course, in the meantime, they’ll keep advancing Apple Intelligence. So, ideally, Apple will replace OpenAI with its own models.

However, the more users interact with a GenAI model, the more it knows their preferences, interests, etc. OpenAI leans into this. By developing memory and continuous learning, ChatGPT becomes very personalized. It learns the users’ preferences and becomes a very experienced assistant. It will be interesting to see how Apple manages the transition when they go full Apple Intelligence instead.

Switching to a new model would be like hiring and training a new assistant - definitely a hurdle that some will avoid.

For now, Apple seems to be still behind in these developments.

Also, while Amazon and Google can still grow in the AI industry by providing AI infrastructure, Apple has nothing to offer here. This might result in slower growth compared to the others.

Let’s Summarize and Compare

📖 The Different Playbooks

Apple: Doesn’t talk too much about AI and aims to bring value based on users’ needs for privacy.

Google: AI at the core, wants to become the leader in GenAI and integrates it across all products.

Amazon: Uses their unique knowledge to drive efficiency into their logistics business and then bring it as solutions to AWS.

I thought it was fascinating to analyze these different approaches and find how each company applies distinct strategies. They are all playing to their strengths and defining their own future in a unique way. We’ll see how it all plays out in 2025.

For me as a builder, the lesson is clear: don’t copy anyone’s strategy—focus on uncovering and leveraging your business’s unique strengths.

2024 felt like a year with more experimentation with AI and adding it “here and there.”

However, 2025 will likely be the year companies integrate AI deeply into their core capabilities, and AI will become required rather than optional.

⚡Besides all of that, the industry will have to figure out how to deal with the massive increase in energy demand. The grid is not ready for it. Countries and businesses will have to invest tremendously to get a seat at the table of the global AI race. But that’s for another time.

I would love to hear your thoughts on today’s edition. Did you like the content? Did you find the new structure easier to read?

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