Innovator’s Dilemma is a term coined by Clayton Christensen, a Harvard Business School professor, to describe the phenomenon of established companies failing to adopt new technologies or business models, despite the fact that they are better or more advanced. This can happen for a number of reasons, including a lack of vision, a lack of resources, or a failure to recognize the potential of new technologies.

In 2023, ChatGPT highlights the innovator’s Dilemma that now faces Google. An answer engine like the ChatGPT interface is a better user experience than ten blue links and a bunch of ads. However, Google has little financial incentive to invest in such an experience. Until now, at least. DeepMind’s Sparrow chatbot is expected to enter beta testing this year. Is this Google’s solution to the Innovator’s Dilemma, a phenomenon in which established companies fail to adopt new technologies or business models despite their superiority? OpenAI’s ChatGPT has been a significant AI hype and has made Google worried about its core business, as it can provide reliable answers to questions, which is typically the domain of search engines like Google.

Google has the capability to respond to ChatGPT, as it has previously developed large language models optimized for dialogue, such as LaMDA and Flamingo, prior to OpenAI’s successful product. Meena was already a chatbot that was capable of having credible conversations with humans by the end of 2020. However, the company has not yet commercialized its research. According to Google, this is mainly due to security concerns, although other factors may also be at play. One may wonder why Google has not yet introduced a model similar to OpenAI’s ChatGPT, despite having the capability to do so. The reasons officially provided by Google, such as reliability and security concerns with large language models, are credible and likely to play a role. At the scale at which Google operates, a chatbot that spreads lies or hates speech could pose a significant reputational risk for the company. Additionally, there could be ethical concerns about creating a chatbot that is so convincing that people attribute consciousness to it.

However, the more significant reason for Google’s lack of action may be that the company is stuck in the Innovator’s Dilemma. Google’s core business, search, is still growing and highly profitable, making it difficult for the company to pivot to a new monetization strategy for a search chatbot, even if it could be profitable. One potential solution for Google would be to launch a commercially oriented chatbot via its subsidiary, DeepMind, and build a competitor product to Google Search and OpenAI. This would allow the company to make a smoother transition while still maintaining its current profitable business.

Self