Sometimes the best product doesn't win. From VHS tapes to AI browsers, the real battle isn't about quality—it's about who controls the doors through which users enter.
Welcome to Plain Sight by Wyzr, where we bring hidden patterns into plain sight. Every week, we explore stories and ideas that help us understand why we are the way we are.
This week we're taking a different direction to explore the AI wars, and their potential trajectory.
Why Distribution Beats Product Every Time
In 1976, two companies launched competing home video formats. Sony’s Betamax offered superior picture quality, better build quality, and more advanced features. JVC’s VHS was bulkier, grainier, and technically inferior in almost every way.
By 1988, Betamax was dead. VHS owned the market.
Sony kept Betamax proprietary and expensive, obsessing over quality and control, while JVC licensed VHS to anyone willing to manufacture it. Panasonic, Sharp, Hitachi, and dozens of others embraced it. While Sony perfected their product, JVC built a fleet of distribution partners. VHS players flooded every electronics store. Movie studios, seeing the massive VHS install base, released more titles on VHS. More content drove more adoption. The flywheel spun faster. The better product lost, distribution won.
The bitter truth is product quality is just the entry fee. The real prize goes to whoever controls how users access that product. The same distribution advantages that built today’s tech empires are being weaponized for tomorrow’s AI supremacy.
Perplexity launching Comet, an AI-powered web browser, while OpenAI developing “Aura,” its own browser aimed at challenging Google Chrome, sends a clear message: the path to AI dominance runs through browser control.
The Distribution Disruption
When ChatGPT launched in November 2022, its chat interface made it the most accessible AI product. In just 5 days, it crossed 1 million users. By January 2023, it had gained 100 million active users—a 9900% growth in just two months.
This was distribution at its finest. While competitors were building better models, OpenAI was the first to get millions to use the product and gather feedback. Access shapes usage more than product quality.
Initially caught off guard, Google’s response revealed the true power of distribution dominance. When Google fought back, it didn’t just launch Bard (now Gemini)—it embedded AI directly into its existing distribution channels. Search results now feature AI overviews. Chrome integrated AI features. Android became a vehicle for AI deployment.
The result? Google caught up not by building a better chatbot, but by leveraging its distribution advantage to put AI in front of billions of users who never had to seek it out.
This isn’t the first time we’ve seen distribution triumph over product quality. When Android launched, iOS was arguably superior in user experience and design. But Google had something Apple couldn’t match: free distribution at scale. Android was open-source, customizable, and available to any manufacturer willing to pre-install Google services, much like VHS. More users attracted more developers to build for the ecosystem, which in turn drew even more users. This created a powerful flywheel effect that proved difficult to overcome.
The Browser Wars 2.0
The browser wars are back, but this time the stakes are different. Cookies are old news.
Every search query, every website visit, every click reveals not just what users are doing, but what they want to do next. Cookies formed the backbone of this extrapolated intent. This intent powers Google’s advertising business, which makes up nearly three-quarters of Alphabet’s revenue.
AI changes everything about intent capture. AI-powered browsers can be fully stateful, remembering everything about your workflow, understanding context across sessions, and predicting what you need before you even ask.
Both Perplexity and OpenAI are already talking about improved workflows and interactions through their browsers. This contextual awareness also addresses one of AI’s biggest challenges: hallucinations. The industry’s initial worry about AI making up facts or giving unreliable answers has largely been alleviated as we’ve learned that AI performs dramatically better with specific context.
When AI has access to your browsing history, current tabs, recent documents, and active workflows, it becomes far more accurate and useful. Instead of generating generic responses, it can give answers tailored to your specific situation, project, or immediate needs.
This is why controlling the browser isn’t just about distribution. The company that knows what you’re working on right now can provide better AI assistance than one that only knows your chat history.
The Monopoly Playbook
We’ve seen this pattern before:
New technology emerges → Companies compete to control access points → Network effects and other advantages create dominance → Market settles into 2-3 dominant players
Google’s search monopoly followed this exact playbook. Now AI companies are racing to control the next set of chokepoints before the cycle completes. The company that controls the default wins.
This is why Google pays Apple an estimated $20 billion annually to be the default search engine on iPhones. This is why Google gives away Android for free. Distribution is worth more than the product itself. Perplexity partnering with Bharti Airtel, and Google announcing free access to students for a year are also moves aimed toward grabbing user base before they become habitual with competitors.
What This Means for the Future
The browser wars aren’t really about browsers. They’re about who gets to be the middleman between humans and information. The browser has already evolved into a platform where cloud offerings and SaaS applications have enabled us to work, collaborate, and create without installing local software. This transformation has made browsers the central hub of digital productivity.
Don’t count Google out. Their response to ChatGPT was slow and bumbling, but they are not laggards anymore. Deploying Gemini models and embedding AI across their ecosystem, expect them to accelerate AI integration across every touchpoint they control, especially within Chrome where cloud applications already thrive. Just as previous tech wars produced limited winners, the AI browser wars will likely result in 2-3 dominant platforms.
We seem to be following the same script as VHS vs. Betamax: superior technology means nothing without superior distribution. Google learned this lesson from Android’s success. OpenAI proved it with ChatGPT’s lightning-fast adoption. Now everyone is racing to control the browser.
Unlike 1988, the winner won’t just control home entertainment, they’ll control how humans interact with information.
Here’s a question for you:
Do you think there will be an AI product that can beat the distribution advantage of tech giants or is the battle for AI dominance pre-determined?
Write to us. We’d love to hear your take on distribution and product. We’ll feature the most compelling responses in a future edition.
What we’re reading this week
The Great Mental Models by Shane Parrish
Blindspots hinder progress. Can we account for all of them? Not really, but the more blindspots you reveal, the better your decision making becomes. If building new perspectives around your understanding of the world, interests you, this book is a great start.
Hope you enjoyed this edition of Plain Sight.
If you did, do share it with your friends.
Until next week,
Amlan
