My take as someone who worked in Cloud, closely with the AI product teams on GTM strategy, is that it was primarily the former: Google was always extremely risk

My take as someone who worked in Cloud, closely with the AI product teams on GTM strategy, is that it was primarily the former: Google was always extremely risk averse when it came to AI, to the point that until Andrew Moore was pushed out, Google Cloud didn't refer to anything as AI. It was ML-only, hence the BigQuery ML, Video Intelligence ML, NLP API, and so many other "ML" product names. There was strong sentiment internally that the technology wasn't mature enough to legitimately call it "AI", and that any models adequately complex to be non-trivially explainable were a no-go. Part of this was just general conservatism around product launches within Google, but it was significantly driven by EU regulation, too. Having just come off massive GDPR projects and staring down the barrel of DMA, Google didn't want to do anything that expanded the risk surface, whether it was in Cloud, Ads, Mobile or anything else. Their hand was forced with ChatGPT was launched ... and we're seeing how that's going.