Yes Google - and particularly DeepMind were far ahead when OAI started. They even have the first paper on Transformers I think. But the people who ended up productising the entire thing was OAI because the incentives weren’t there for Google to make ChatGPT.
The biggest miss from Elon seems to be that he overestimated Google's lead. Did Google really drop the ball on staying in 1st place and if so why?