How a Cookie Crumbled

Children, let me tell you a story.

There once was a wonderful little cookie with a delicious white filling between two chocolatey layers. My mother used to bring them home from the A&P store where she shopped on 71st Street in Chicago.

“Oreos!” we chimed.

“No, they’re Hydrox,” she said. 

But they looked just like Oreos and tasted almost the same.

But eventually the Hydrox disappeared. 

All gone. Eaten by Oreos and their big Daddy, Mr. Nabisco.

***

Hydrox is a story of American capitalism. The originator, the inventor, the first “out of the box,” lost the battle.

We may be seeing the story repeat today in the AI race. ChatGPT dominated in the beginning of the race. Claude, by Anthropic, made an early challenge and still has a piece of the market mostly in business applications. Google had been working on artificial intelligence for over a decade but was timid about introducing it. Then it came out with its Gemini product without much marketing muscle. It barely made a dent.

The story is reminiscent of Hydrox and Oreo. Hydrox appeared in 1908, with Oreo hitting the shelves in 1912. They looked alike, but Oreos had a sweeter chocolate flavor. Hydrox had its lovers, the people who thought the original was the “real thing,” but Oreos had the brand muscle of Nabisco and buried Hydrox with a huge advertising budget. 

Grocers listened to their customers, and gradually Hydrox lost its market share and finally just disappeared.

Which was the better cookie? I liked Hydrox. It was the “real thing” and also favored in our kosher home because they used vegetable oil, not lard. And eventually Oreo removed their animal fat and its taste won me over. As a matter of fact, I snapped up a couple before I started this article.

***

In business in America, nobody owns the market. The pioneer, like Hydrox, is always a target.

In the computer search business, Google has dominated the market, making billions of dollars a year, after killing its predecessors like AOL and Yahoo. 

Then came ChatGPT and the Google people could see their domination of search being challenged by the ease of use of Chat. Perhaps that fear of undercutting their search cash cow kept Gemini on the sidelines while competitors like ChatGPT and Claude took users’ computer time.

However, now Gemini has improved and is quickly gaining market share.

Is Google’s Gemini today’s Oreo and the other LLMs Hydrox? Or, will a cheaper Chinese product swoop in from nowhere?

The market will decide.

Another Oreo, please?