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😬Google vs OpenAI Battle
PLUS: Disney Sues Google AI | Trump Overrides State AI Laws
Reading time: 5 minutes
🗞️In this edition
Google and OpenAI launch new AI on same day
Google hit with Disney copyright complaint day before OpenAI deal
Trump just overrode state AI laws
In other AI news –
El Salvador brings xAI to five thousand public schools
Opera launches twenty dollar AI browser subscription
Disney partners with OpenAI for Sora generated character videos
4 must-try AI tools
Hey there,
Google and OpenAI launched rival research agents on the same day, Disney hit Google with a copyright threat right before announcing a massive OpenAI deal, and Trump moved to override state AI laws with a sweeping executive order.
We're committed to keeping this the sharpest AI newsletter in your inbox. No fluff, no hype. Just the moves that'll matter when you look back six months from now.
Let's get into it.
What's happening:
Google released Thursday a "reimagined" version of its research agent Gemini Deep Research based on the Gemini 3 Pro foundation model.
This new agent isn't just designed to produce research reports. It now allows developers to embed Google's research capabilities into their own apps through the new Interactions API. Google says it will soon integrate deep research agents into Google Search, Google Finance, Gemini App, and NotebookLM.
Google created a new benchmark DeepSearchQA to test agents on complex multi-step information-seeking tasks. Google's agent bested competition on its own benchmark and Humanity's Last Exam. However, OpenAI's ChatGPT 5 Pro was surprisingly close second and slightly bested Google on BrowserComp.
But those benchmark comparisons were obsolete almost immediately. On the same day, OpenAI launched the highly anticipated GPT-5.2, code-named Garlic. OpenAI says the newest model bests rivals, especially Google, on a suite of typical benchmarks.
Perhaps the most interesting part of the announcement was timing. Knowing the world was awaiting Garlic release, Google dropped AI news of its own.
OpenAI's GPT-5.2 coming to ChatGPT paid users and developers via API in three flavors: Instant for speed-optimized routine queries, Thinking for complex structured work like coding and math, and Pro for maximum accuracy on difficult problems.
"We designed 5.2 to unlock even more economic value for people," said Fidji Simo, OpenAI's chief product officer. "It's better at creating spreadsheets, building presentations, writing code, perceiving images, understanding long context, using tools and then linking complex multi-step projects."
GPT-5.2 lands amid an arms race with Google's Gemini 3 topping LMArena's leaderboard across most benchmarks.
Why this is important:
Same-day launches show intense competition where timing announcements to blunt competitor's news is strategy.
Google integrating Deep Research across Search, Finance, Gemini App, and NotebookLM is an ecosystem play OpenAI can't match without owning distribution platforms.
GPT-5.2's three flavors (Instant, Thinking, Pro) targeting different use cases shows OpenAI segmenting the product line, not building a single frontier model.
Our personal take on it at OpenTools:
Coordinated same-day launches are competitive theater, not coincidence.
Google knew OpenAI was launching Garlic. They dropped Deep Research news the same day to split attention and their own news cycle.
The $1.4T infrastructure commitments made when OpenAI had advantage now look riskier as Google catches up. If traffic declines while costs rise, unit economics deteriorate rapidly.
Google's Interactions API letting developers embed Deep Research is infrastructure play. Make it easy to build on Google's agents, create ecosystem dependency. OpenAI's API strategy is similar but Google has a distribution advantage.
The benchmark wars (DeepSearchQA, Humanity's Last Exam, BrowserComp) are noise. Each company shows charts where they win. Independent evaluation consistently shows models converging on similar capabilities with marginal differences.
Missing image generator despite Altman calling it priority and Google's Nano Banana Pro success shows OpenAI can't match Google's multimodal integration pace.
What's happening:
Disney accused Google of copyright infringement on a "massive scale," claiming its AI models generated content resembling characters from Frozen, Deadpool, Star Wars, and Guardians of the Galaxy. In a cease-and-desist letter sent Wednesday, Disney demands Google stop allegedly infringing on copyrighted works.
The notice came one day before Disney announced a billion-dollar deal with OpenAI allowing Sora AI users to create videos using 200+ characters from Disney, Marvel, Pixar, and Star Wars. AI-generated videos will also appear on Disney Plus.
Disney's letter calls out Google's Gemini, Veo, Imagen, and Nano Banana AI models, saying Google serves as a "virtual vending machine" that's "flooding the market with infringing works" while "reaping enormous profits." Disney alleges Google "refused" to implement safeguards despite engagement "for months."
Google spokesperson Julie McAlister says the company has a "longstanding and mutually beneficial relationship with Disney" and will "continue to engage." She cited Google-extended and YouTube's Content ID as copyright controls giving "sites and copyright holders control over their content."
Why this is important:
Disney sending cease-and-desist one day before announcing $1B OpenAI deal shows strategic timing. They're establishing legal positions against Google while partnering with competitors for authorized AI content generation.
"Virtual vending machine flooding market with infringing works" is aggressive language suggesting Disney believes Google's profiting from systematic copyright violation, not isolated incidents.
Disney alleging Google "refused to implement safeguards" despite "months" of engagement contradicts Google's claim they have copyright controls. That's a factual dispute about good faith negotiations.
Our personal take on it at OpenTools:
Disney sends cease-and-desist to Google on Wednesday, announces $1B OpenAI deal on Thursday. That's not a coincidence. Disney's using legal threats against Google to establish leverage while demonstrating OpenAI partnership as an alternative model.
The four models cited (Gemini, Veo, Imagen, Nano Banana) show Disney's targeting Google's entire generative AI portfolio, not just one product. That's a comprehensive attack.
Disney alleging Google "refused to implement safeguards" despite months of engagement is a key factual claim. If true, that undermines Google's good faith defense. If false, Disney's overstating case.
Discovery will determine which.
This is licensing negotiation conducted through public legal threats. Disney wants revenue from AI companies using its IP. Google either pays or proves in court that training is fair use. Given Disney's litigation budget and IP portfolio, most companies will pay.
Disney Plus hosting AI-generated videos from OpenAI partnership shows Disney's not anti-AI, they're pro-licensing. They'll embrace AI that pays them while suing AI that doesn't.
This accelerates the shift from "is AI training fair use" debate to "how much should AI companies pay for training data" negotiation. Disney's forcing that transition through aggressive legal action.
What's happening:
Trump signed an executive order Thursday directing federal agencies to override state AI laws, specifically targeting Colorado's consumer protection law that bans algorithmic discrimination.
The order creates an "AI Litigation Task Force" empowering the Attorney General to sue states over laws the administration deems burdensome. Commerce Secretary Howard Lutnick has 90 days to identify states with conflicting laws and potentially cut their rural broadband funding from the $42B BEAD program.
The FTC must issue guidance claiming state laws requiring truthful AI outputs are preempted by federal trade law. The FCC will develop federal AI disclosure standards that override state requirements.
David Sacks, White House AI and crypto czar, stood behind Trump during signing. The order mirrors a draft we reported last month giving Sacks and the AG unprecedented control over AI policy while sidelining traditional federal agencies.
Why this is important:
This federal power grab over state rights, constitutionally questionable.
Congress failed twice to pass AI moratoriums in Trump's "Big Beautiful Bill" and the NDAA. Trump's circumventing legislative process with executive authority, threatening billions in broadband funding if states don't comply.
Colorado's algorithmic discrimination ban is the test case. The order claims preventing bias "may force AI models to produce false results." That framing positions accuracy against fairness, setting up litigation over whether states can require AI companies to prevent discriminatory outcomes.
Our personal take on it at OpenTools:
This weaponizes federal funding to coerce states into dropping AI regulations.
The $42B BEAD broadband program becomes leverage. States choose: keep AI consumer protections or lose rural internet funding. That's not a policy debate, it's extortion.
Sacks driving this gives Silicon Valley's most aggressive VC direct pipeline to override democratically passed state laws.
If this survives legal challenges, it's massive centralization of power in the executive branch over emerging technology.
El Salvador teams up with Elon Musk's xAI to bring AI to 5,000 public schools – El Salvador President Nayib Bukele says his administration is partnering with Elon Musk’s AI company xAI to bring artificial intelligence into more than 5,000 public schools.
Opera wants you to pay $20 a month to use its AI-powered browser Neon – In addition to the AI features, the subscription gives users access to top models like Gemini 3 Pro, GPT-5.1, Veo 3.1, and Nano Banana Pro. Subscribers will also get access to Opera’s Discord community and direct access to its developers.
Disney signs deal with OpenAI to allow Sora to generate AI videos featuring its characters – Disney is also making a $1 billion equity investment in OpenAI.
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ChefGPT - An AI-powered recipe recommendation tool that suggests recipes based on the ingredients and tools you have
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