With AI development in full swing and a just-announced $500 billion plan to further build the infrastructure to serve the future business ecosystem, the industry’s development is inevitable.
Of course, as I’ve explained in AI Supercycle, this economic paradigm will play out in 30-50 years.
As you can see, this will touch different industries, depending on the stage of this supercycle.
These sub-cycles will work in parallel at a particular stage and reinforce each other.
We’re just in the first phase of what I’ve called The Web².
However, and that’s the interesting take, as The Web² will be shaped up, it will also work to layer up on top of emerging technologies, finally viable by AI.
Thus, it turns into a re-inforcing loop of faster economic progression.
This will turn into a multi-cycle of AI integration, moving from a feature to a core form factor of a business:
That means many organizations, especially those operating in the software industry, must adapt quickly to a new reality.
Why? As this will be a disruptive/creative moment.
Many parts of the previous paradigm will be scrapped, as they were transitional in the first place.
Other parts will be kept to build upon and expand many times over.
And since time is running out, they’ll have to do it by “defending and attacking” the market to prevent falling into the Incumbent Paradox.
That means, as a company, you’ll need to preserve (for as long as you can) and wholly reshape, transform, and redefine (potentially also in complete conflict with your core) your business model.
The defend/attack will only be the beginning of a “catalyst” that must go through transformation and creation.
Yet, that’s where we are today; many incumbents are still in defend-attack mode.
Before they can pass to transform-create mode.
And I’ll use the example of a company trying to do it as we speak: Google.
This is part of an Enterprise AI series of (possibly) daily short pieces to tackle many of the day-to-day challenges you might face as a professional, executive, founder, or investor in the current AI landscape.
All these pieces are freely available to you. If you find the piece isn’t enough to help, you can contact me once you join in as a Founding Member.
In The Build vs. Buy Dilemma in Enterprise AI, I’ve explained how, at a certain point, building AI into the core will result in a necessary transformation of the whole.
That transformation comes with a complete re-org; there is no way out!
The progression from technical implementation to full-scale business transformation starts with project-based changes like technology stack and team structure; a tipping point is reached when technical initiatives demand broader organizational shifts.
The reason is that integrating that technology into the core will require a cultural shift within the organization, which can only happen via a massive re-org.
This marks the transition to a strategic initiative, requiring changes in business processes, operational models, and strategic capabilities.
Ultimately, it leads to business transformation involving organizational redesign, cultural shifts, and business model evolution.
This will need to move from a project-focused to an AI-first re-org:
-
Project Focused: Focused on tools, task automation, and efficiency. Skills are technical and team-specific, with siloed teams and clear boundaries.
-
Innovation Driven: Innovation-driven, emphasizing process innovation and value creation. Skills shift to cross-functional collaboration, with innovation hubs and fluid boundaries emerging.
-
AI-First Re-Org: Defined by an AI-first mindset, driving business reinvention and market leadership. Organizations adopt AI literacy, cultural embedding, and adaptive structures, removing traditional boundaries.
For that, I’ll tackle one specific incumbent’s re-org case study, in which the AI-first re-org is happening as we speak, to defend its market position while attacking the market to try to define what’s coming next!
Whether it’ll succeed or not, we’ll see.
Also, and to be sure, this internal process is not easy; it might seem quite chaotic, it’s pretty violent in terms of demanded change, and it might leave many, not ready to embrace it, out of it.
And yet, that’s happening to the company that has defined the last nearly 30 years of the web…
The strength of Google has always been its bottom-up consumer traction. Without it, there would be no Google.
That’s why Google, as a consumer-first company, is aware that not having an AI product as strong as ChatGPT would disrupt its core search business model.
If Google doesn’t aggressively gain market shares by this year to ChatGPT, with an AI native product detached from search, Google might have lost the “AI Chatbots” train for good.
That’s why Google consolidated more AI teams into its London-based DeepMind division, led by Demis Hassabis, to streamline development and enhance its AI research-to-deployment pipeline.
This re-org aims to make Google’s Gemini AI rival ChatGPT with a target of 500 million users by 2025.
Whether or not it will achieve it will need to be seen. Byt that is the key take. As a company like Google defends and attacks, it might also figure out a new business unit, completely disjointed by its core, which might become its future.
Indeed, I’ve explained in Google’s AI Triad the foundation of its business model in the AI era:
That will sit on a hardware infrastructure that will also be used to power up enterprise services via Google’s Cloud infrastructure.
In reality, that will be primarily leveraged to power up the plethora of consumer products Google develops and distributes.
That’s the company’s DNA.
Indeed, as of now, we’re looking at a complete redefinition of the search industry into what I’ve called “cognitive discovery.”
Yet, and that’s a key take, assuming Google won’t survive as a search engine, the good news is it might transition into something else.
I’ve been tracking for a decade, the side investments Google (more correctly, Alphabet) has placed in many other areas:
Out of these investments, an exciting one has come out.
Waymo is one of the hidden gems from Google, now Alphabet.
The self-driving company, born as part of Google’s other bets on the future, just raised $5.6 billion and hit a critical milestone of 150,000 paid autonomous trips a week!
Now, Waymo is entering fully autonomous AI by leveraging Google’s Gemini infrastructure via its End-to-End Multimodal Model for Autonomous Driving (EMMA).
LLMs like Waymo’s Gemini-powered EMMA could revolutionize self-driving cars by offering a holistic “world knowledge” base beyond standard driving data, allowing cars to understand and predict complex scenarios.
In short, LLMs use advanced reasoning and adapt to unexpected environments, making them more flexible and practical in real-world conditions.
This shift from modular systems to end-to-end models could reduce accumulated errors and improve decision-making, propelling autonomous driving closer to seamless, safe deployment at scale.
Of course, this is only at the embryonic stage, and we’ll know its real potential in a few years.
In the meantime, how does Waymo tackle the autonomous vehicle problem?
Assuming Google doesn’t survive as a search giant, can it transform into something else?
Looking at the latest data, it is gaining so much traction to be as large as Lyft in terms of market shares for SF rides!
Waymo is the closest view into what it might be of Google in the coming 20-30 years, under a new vest if it doesn’t survive as a search giant.
Thus, even if Google does not survive as a search engine, it might change its skin and become something else.
Again, the underlying AI infrastructure enabling Waymo to scale is Google’s flagship AI model: Gemini!
Not only that, but a key take here is that many moving parts of Google, even legacy tech like Google Maps, won’t be scrapped but integrated into the new.
The process of course is not a linear one, a designed one.
It’s a chaotic one, a messy one, where only in hindsight we’ll make sense of the change that happened.
And yet, that starts from a complete re-org based on attack and defense.
Only from there we’ll see transformation and creation of a whole new, that will move far away from what’s today is Google’s core (the advertising business at scale).
That is why Google’s Strategic Evolution (2024-2030+) focuses on defending its core—search dominance, ad revenue, and infrastructure—while aggressively attacking with initiatives like Gemini AI, DeepMind integration, and expanding user bases.
By attacking and defending, new stuff, also unforeseen, will come about, as transformative first, then creative, to transition the company into something new.
Transitioning to transformation, Google aims to scale Waymo, integrate EMMA, enhance Maps technology, and build AI infrastructure.
The ultimate goal is to create a future defined by a completely different business unit, that in the meantime we’ll become a whole new player in an industry we can’t imagine today (a good bet is autonomous systems via Waymo), with new revenue streams, and market leadership beyond 2030.
Will this go through?
-
Emergence of a Horizontal Enabling Layer: AI is becoming an inevitable technology that acts as a horizontal enabling layer, driving an economic supercycle and reshaping industries.
-
AI Integration Multi-Cycle: Businesses must adapt as AI evolves from a feature to a core business form factor, requiring rapid shifts to defend and attack markets.
-
The Tipping Point: AI adoption triggers a transition from technical implementation to transformational reorganization, demanding cultural shifts and structural overhauls within organizations.
-
Project-Focused to AI-First Re-Org: Organizations must progress from task-based automation to innovation-driven processes and ultimately an AI-first mindset.
-
Google’s AI Re-Org: Facing disruption from AI tools like ChatGPT, Google is reorganizing around AI with Gemini and DeepMind to defend search dominance and attack emerging markets.
-
Gemini AI and Consumer AI Push: Google targets 500M users for Gemini AI by 2025, leveraging consolidated AI teams and a streamlined research pipeline to rival ChatGPT.
-
Waymo as Google’s Future? Waymo, powered by Gemini and EMMA, demonstrates Google’s potential transformation from a search engine to an autonomous systems leader.
-
Cognitive Discovery in Search: Google is redefining search into “cognitive discovery,” combining AI infrastructure with consumer-first DNA to stay competitive.
-
Strategic Evolution Framework: Google balances defending its core, attacking new opportunities, and creating future-focused business units, aiming for long-term market leadership.
-
Autonomous Systems as a New Frontier? If Google’s search dominance fades, its investments in Waymo and AI infrastructure position it to thrive in autonomous driving and other industries beyond 2030.
With massive ♥️ Gennaro Cuofano, The Business Engineer
This is part of an Enterprise AI series of (possibly) daily short pieces to tackle many of the day-to-day challenges you might face as a professional, executive, founder, or investor in the current AI landscape.
All these pieces are freely available to you. If you find the piece isn’t enough to help, you can contact me once you join in as a Founding Member.
