Google I/O and the Coming AI Battles – Stratechery by Ben Thompson
stratechery.com/2023/google-i-o-and-the-coming-ai-battles
What Jamie wrote
Thompson starts with a pretty simple reflection on Google and AI, transitions through a really compelling strategic framing, and ends with a view on Protestantism and Reformation? Yes he does.
His clarification of "disruptive innovation" and "sustaining technology" is a very interesting take.
Or maybe not. I tend to believe that disruptive innovations are actually quite rare, but when they come, they are basically impossible for the incumbent company to respond to: their business models, shareholders, and most important customers make it impossible for management to respond. If that is true, though, then an incumbent responding is in fact evidence that an innovation is actually not disruptive, but sustaining.
To that end, I take this Google I/O as evidence that AI is in fact a sustaining technology for all of Big Tech, including Google. Moreover, if that is the case, then that is a reason to be less bearish on the search company, because all of the reasons to expect them to have a leadership position — from capabilities to data to infrastructure to a plethora of consumer touch points — remain. Still, the challenges facing search as presently constructed — particularly its ad model — remain.
I have said, as have many, that AI will disrupt industries. But Thompson's take on why AI is very likely "sustaining technology" is a compelling one. Can there be both? I think yes, but perhaps a sustaining technology disrupts industries because some companies are better at adopting than others? Said another way, it becomes table stakes everyone has to have and it takes the slow and weak out, but doesn't fundamentally allow a breakout from "the front"?
The mere speed at which established tech companies are bringing AI into their solutions certainly reinforces the view that it is sustaining technology. The web wasn't adopted this fast. And consider how slow crypto adoption has been in big tech, is that a sign of disruptive innovation?
The shift towards the 2nd half of this essay into regulation and reformation is also interesting. I think we've seen this play out enough that it is fair to assert that when you have big established companies asking for regulation they see it as a way of securing their market position. The more AI is regulated at this point, the less innovation and disruption we'll see.
Very thought provoking.