Kodak problem. Kodak invented the digital camera but their revenue came from making photographic film. They were unable to take advantage of their invention because it would cannibalise their revenue. That didn't stop other people and the revenue died anyway.

Google's main revenue is ads based on search. LLMs are a competitor to search. Creating better LLMs will cut into search volumes.

In any large organisation this is extraordinarily difficult to manage - they have to incentivise the new tech that is actively harming the current revenues, while maintaining as much of the old revenues as possible, without creating internal conflict between these two parts of the organisation that will kill it.

Though in fairness to Google they do seem to realise this and are trying to adapt - they're letting the LLM folks mess with search. It'll be interesting to see how this goes.

This is a sensible-seeming take at first blush, but it doesn't hold up to any scrutiny (or maybe my scrutiny is faulty - you tell me!)

Sundar and many of his executives have certainly read or heard of The Innovator's Dilemma, and I expect they're all moderately paranoid that it will be their downfall.

Also, that's not it. Google has a great ai app called Gemini where they have at various points hosted the top ai image generation model (certainly for speed, and for a while for accuracy) and have innovated with features like deep research

They are monetizing their ai conversations more effectively than OpenAI could dream of via ads and chat in Google search.

They are heavily investing in compute and talent.

When they've added llm results to Google search it has _increased_ engagement and re-engagement.

What part of the competition are they blissfully ignoring?

(I have counter arguments to some of these points, but I would rather hear other people's)