The race to put out a widely adopted and highly competent digital assistant is a fight to control the next popular tech platform. It just so happens that the companies poised for a heated confrontation over AI agents are also the two dominant digital advertising firms.
Meta (META), which reports quarterly results Tuesday, and Google (GOOG) are headed for an AI showdown.
Last month Meta’s Muse burst onto the scene, delivering the first popular AI agent for normies, and just cracked a download milestone. Muse’s early success, in both downloads and praise, previewed a world where more people rely on their digital helpers to get work done and manage their daily routines.
But even as billions of people are plugged into Meta’s social networks — Facebook, Instagram, and WhatsApp — users don’t depend on Meta in the same way they do Google and Apple (AAPL).
More cautious tech users might wait for the first wave of early adopters to find the bugs and iron out the kinks. The trust that goes with safeguarding emails, calendars, and wallets hasn’t historically been Meta’s purview. Better to hold out for whatever consumer-focused agent the iPhone maker or the Gmail company has in store.
First-mover status has won Meta public goodwill and an upward jolt in its stock price. Still, that hasn’t made the threat from its advertising rival any less potent.
Several analysts have said that Google’s future agent offering is a key risk facing Meta. Being first is often good enough in the tech world. But what comes second can be better — or more trusted. And in the uncharted territory of new AI services, early, tech-oriented users are likely to be different from the masses of people who enter the market later on.
“Google remains well positioned to lead in the AI era supported by proprietary models, custom silicon & broad product distribution,” wrote Bank of America analysts led by Justin Post in a note earlier this week. He added that a competitive agent and broader Gemini 4 launch could be catalysts for the search giant.
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Another point of tension between Meta and Google is how their legacy businesses can help or hurt their AI ambitions.
Google and Meta are the top dogs in the digital advertising market. They account for more than half of global ad revenue. But one of the crucial ideas behind AI agents is moving away from a screen-phone-app interface. Mobile apps prospered because they allowed for an easier, more intuitive form of computing. AI agents, taken to the extreme, promise to do away with computing altogether, or at least in the way we are used to.