The sudden shift in the industry’s landscape got me thinking about a classic tool for understanding any industry. Harvard Business School professor Michael Porter created the “Five Forces” framework in 1979, and it still stands as a brilliant way to grasp a given industry’s big picture. Note that it’s a way to characterize an industry, not an individual company. 

So, for example, the first force, “threat of new entrants,” means, “Is this an industry in which new entrant companies could easily compete, or not?” If the answer is, “This force is weak,” it would mean there is little threat of new entrants coming into that industry, which would be good news for incumbents. We asked expert analysts Charlie Dai of Forrester and Arun Chandrasekaran of Gartner and our own Fortune AI experts for context about how each force might affect Google Gemini and OpenAI.

Force One: Threat of new entrants. Chandrasekaran sees the industry becoming “a three-horse race” with OpenAI, Google, and Anthropic; he can’t see how a new company could “be on a par with these three.” Dai sees formidable barriers to new entrants in “compute cost, talent scarcity, and regulatory complexity.” Conclusion: This force is weak which bodes well for the incumbents. Google may be better positioned than OpenAI given how much more of the AI value chain it controls.

Force Two: Bargaining power of suppliers. Dai says suppliers of chips hold strong power because only a few companies, especially Nvidia, AMD, and Huawei, design the best chips and can’t supply them fast enough. The picture here is similar to the vast amounts of AI cloud capacity that AI providers must buy or build. Chandrasekaran notes that the major LLM companies train their models by crawling the internet and scooping up data—but some data providers are now demanding money. This force is strong. Google may be better protected by its control of its own chips, its own cloud, and nearly all its needed infrastructure.

Force Three: Bargaining power of buyers. It’s tempting to think that buyers aren’t super-strong in bargaining because over time they’ll get effectively locked into a provider’s system. “If [OpenAI’s] ChatGPT is integrated into your workflow and processes, extricating out of an application like ChatGPT is not really easy,” Chandrasekaran says. But buyers are increasingly using multiple models and finding they can be compatible. This force is moderate to strong. Google has stronger structural lock-in, but OpenAI has more brand affinity from consumers.

Force Four: Threat of substitutes. “Open-source alternatives like DeepSeek and Qwen will play a key role” in the industry, Dai says. In addition, Chandrasekaran says, “we are starting to see smaller language models challenging the larger models in very specific domains.”  This force is medium and getting stronger. Google and OpenAI are about equally able to confront it.

Force Five: Rivalry among existing firms. Our experts agree: This force is strong and getting much, much stronger. OpenAI and Google are in a virtual tie, though OpenAI has fewer defensive moats and must innovate quickly to retain its lead.

Bottom line: In what may be the most profoundly important industry yet seen, OpenAI has a fragile lead but faces an imposing foe that may benefit more as the Five Forces act on the sector. In five years, will one be the clear winner? Or will a Chinese competitor show that we grievously underestimated the “threat of new entrants”? Going through your industry’s Five Forces framework can be a demanding exercise, but it’s worthwhile for leaders in any industry. When done right, it will spark debates, insights—and possibly even a code red.—Geoff Colvin

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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S&P 500 futures are up 0.33% this morning. The last session closed up 0.88%. STOXX Europe 600 was down 0.17% in early trading. The U.K.’s FTSE 100 was down 0.39% in early trading. Japan’s Nikkei 225 was up 1.81%. China’s CSI 300 was up 0.95%. The South Korea KOSPI was up 2.12%. India’s NIFTY 50 was up 0.79%. Bitcoin was at $89K.

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CEO Daily is compiled and edited by Joey Abrams, Claire Zillman and Lee Clifford.