The year of orchestration and ecosystems
The Apple-Google synergy is particularly fascinating because it essentially creates a "duopoly of distribution " at the system-level orchestration level.
Thank you for tuning in to week 222 of the Lindahl Letter publication. A new edition arrives every Friday. This week the topic under consideration for the Lindahl Letter is, “The year of orchestration and ecosystems.”
Let’s distill some complex topics into more approachable views. Last year we were all overwhelmed by the excessive data center planning news that hyperscalers shared and kept sharing with us throughout the year. It’s pretty obvious now that last year was the year of scale based announcements. Compute was the new oil. That strategy has been questioned deeply based on the future of language models. Some people went as far as explaining that language is not intelligence. Billions of dollars are going to be spent or at least were planned to be spent. Plans have been made and a direction was set. We will see how much of this actually gets shovels into the ground. Data centers had zero cool years ago and executives made huge pushes to celebrate that the cloud was king. The pendulum swung back in a big way during 2025.
To that end the data centers and compute have to feed something going forward in terms of real delivery. That future compute spend is probably going to be smartphone driven. This is the ultimate hardware pivot that recognizes the $1,000 device in everyone’s pocket is the ultimate gateway, regardless of how much was spent on H100s last year. Desktop computers peaked around 2022 and the parts are just getting more and more expensive. Memory manufacturers are just leaning into the AI boom and abandoned consumer sales. I have been thinking deeply about the ubiquity of smartphones and to some extent tablets and how much of that stockpiled compute is going to end up being spent on requests generated in those ecosystems. They are the form factor that is going to drive all the AI usage. A lot of people thought home speakers were going to kickstart the revolution years ago, but that promise never realized anything beyond timers and music. Certainly some players think glasses are going to be part of the computing experience as well. We are seeing a bunch of smartglasses start to show up. All that is happening, but the one thing I am singularly focused on at the moment is the latest announcement that Apple will be using Gemini means that the ecosystem of smartphone AI will be dominated by Google [1]. It’s probably the last really big protected moat that both companies are carefully guarding.
Previously, I actually thought Apple would end up using a local run model setup from the phone which was inherently very private and kept your data localized. They were just going to have the more advanced calls go external in a private way and keep that overall usage minimized. Something must have changed in the overall expectations for Apple as they are now clearly going to call the cloud to get Gemini access. All the other players fighting for attention are now ultimately fighting against a true ecosystem moat protected by some pretty high and impenetrable waves. That is why I think this is the year orchestration displaced raw capability as the dominant source of advantage in the ecosystem of technology systems. The most important competitive outcomes are no longer determined by who trains the largest model, builds the fastest chip, or announces the highest qubit count. They are determined by who can coordinate hardware, software, capital, policy, and distribution into a coherent, evolving system.
That is why this Apple and Google synergy will end up relegating all other competition outside the moat. A moat built on agreement and ecosystem. Really the best plan the other competitors in the space have is to get a browser or an app that can run on these devices. However, based on the inherent level of orchestration and deep integration that Apple has with its own products and Google has with the Android ecosystem every other player is just an outsider looking into someone else’s walled off ecosystem. I know people can download and use other apps, but the deep integration to the ecosystem is now off the table.
Across AI, cloud computing, semiconductors, quantum research, and energy infrastructure, the winners are increasingly those who control interfaces and sequencing. What is emerging now is not a collection of breakthroughs, but a new phase of technological power built on orchestration. People are going to see what can be done with the technology and how that extends to getting things done for them in real time. Yes, orchestrated ecosystems can form a moat, and in practice they are becoming one of the few durable moats. The critical distinction is that orchestration is not a single asset. It is a system of constraints, dependencies, and incentives that compounds over time. This is why companies that appear dominant at the model or product layer often discover that their position is far more fragile than expected.
A true orchestration moat emerges when an actor, probably Apple or Google, controls sequencing rather than capability. Capability can be copied, rented, or leapfrogged. Sequencing is harder to dislodge because it determines what gets built next, who gets paid, and which paths are economically viable. When a company or coalition controls interfaces, standards, and timing across multiple layers, competitors may match individual components but still fail to displace the system.
This is where OpenAI illustrates the problem. OpenAI has strong leverage at the model layer, but that leverage is thin without full ecosystem control. Models are increasingly substitutable, distribution is mediated by partners, and infrastructure is rented rather than owned. OpenAI wishes it were a moat because its value concentrates in a narrow slice of the stack that others can route around. That is not orchestration. That is a dependency.
By contrast, hyperscalers such as Microsoft and Google approach AI as an orchestration problem. They align chips, data centers, software platforms, pricing models, enterprise contracts, and regulatory posture into a single evolving system. Even when individual models underperform or become obsolete, the ecosystem persists. The moat is not intelligence. It is coordination.
What’s next for the Lindahl Letter? New editions arrive every Friday. If you are still listening at this point and enjoyed this content, then please take a moment and share it with a friend. If you are new to the Lindahl Letter, then please consider subscribing. Make sure to stay curious, stay informed, and enjoy the week ahead!
Footnotes: