As history predicts, the tech giants lagged the AI race after doing the initial research breakthroughs.
It’s the innovator’s dilemma all over again. Small companies focused on the next frontier running rings around the incumbents.
This is a well known phenomena, but it’s still fascinating to see it with tech giants like Google and Microsoft which have expressly designed their organisations to escape the trap. Yet here we are in a world where CoPilot and Gemini aren’t the front runners and Microsoft’s attempts to move early via openAI partnership have been… mixed to put it politely.
It’s a well known phenomenon but worth a recap, also based on my own observation in various adventures
- Large organisations optimise for predictability
- The reward system gets aligned to this safe behaviour
- This attracts people who are good at steady, incremental improvement
- So that when the disruption arrives they’re simply not equipped to handle it in spite of having capital: the people, the processes, the reward system, all are ill-designed to handle the new thing.
No mission statements on agility can navigate the twists and turns of a system designed for stability and predictability.
Of course because of their heft, many of the large ships do eventually catch-up and often assimilate the upstarts. And so they do exactly what they are designed for: Safety, Capital Allocation Discipline, Survival, Scale
But they do miss all the fun.