I don't think OpenAI's lead is holding Google back. Companies are held back by their own mentalities, and newer companies have fewer restrictions.

As an example, Google supposedly had better text-to-image models than DALL-E/Midjourney/etc, but didn't release them because they "reinforced harmful stereotypes".

It's also probably holding back on LLM because it doesn't want to harm its search cash cow, just like Kodak didn't want to hurt its film cash cow by developing digital cameras (which it invented).

Of course, now it is forced to productize LLMs (Kodak was actually the largest manufacturer of digital cameras (by unit number) when it went bankrupt, but that didn't help it).