Google's Nano Banana Phenomenon Takes the World by Storm; Is ChatGPT in Trouble?

TradingKey - Google recently unleashed a game-changer: its AI assistant Gemini launched the Nano Banana image editing model, which has taken the internet by storm. Last weekend, Gemini became the most popular free app on the iPhone, dethroning ChatGPT and marking an escalation in the AI arms race among tech giants.

Dubbed "the most powerful image editing model currently," Nano Banana excels in character editing and scene retention, surpassing the previous top AI image model, Flux Kontext.

Since its launch on August 26, Nano Banana has driven 23 million new downloads for Gemini and has edited over 500 million images. Richard Windsor, founder of research firm Radio Free Mobile, notes that while ChatGPT holds a dominant market share in generative AI, the emergence of Nano Banana could expose vulnerabilities in the "ruler" and potentially shift the competitive landscape. He argues that Google's decade-long research in computational photography and data enhancement gives it an advantage in challenging ChatGPT's standing.

Functionally, Nano Banana allows users to upload original images for modification or integration, maintaining the integrity of the main subjects or objects across multiple edits. Analysts point to this as Gemini's edge over other image editing models and Google's breakthrough in capturing the AI market.

Currently, the AI app market landscape remains mostly unchanged. According to Evercore ISI, ChatGPT still leads with a usage rate of 53%, while Gemini follows at 43%, in second place. However, a new report from September indicates high user satisfaction with Gemini, suggesting that it may overtake ChatGPT in popularity.

Analysts believe that if Gemini continues to attract new users with its AI image editing capabilities and expands its user base, it could surpass ChatGPT in the consumer segment. Windsor warns that if Gemini becomes the top consumer AI app, it could have "catastrophic consequences" for OpenAI, as the company's valuation and future prospects hinge on its ability to build the largest consumer AI ecosystem.

On Monday, September 15th, Google (GOOG) (GOOGL) surged 4.3%, with its market capitalization exceeding $3 trillion for the first time. The stock has risen 32.2% this year.