Ben Thompson’s latest piece hits on something crucial: when computing paradigms shift, yesterday’s winners often become tomorrow’s strugglers.
The risk both companies are taking is the implicit assumption that AI is not a paradigm shift like mobile was. In Apple’s case, they assume that users want an iPhone first, and will ultimately be satisfied with good-enough local AI; in AWS’s case, they assume that AI is just another primitive like compute or storage that enterprises will tack onto their AWS bill.
The article is worth reading in full. The author is much more bullish on Google adapting well. Pushing the key points a bit further:
First, the winner’s curse isn’t just about technology - it’s about organizational metabolism. Big winners, sometimes, don’t just have the wrong tech stack; they have the wrong clock speed. Google’s chaotic, college-campus culture that Thompson praises isn’t just quirky - it’s actually a survival mechanism. When you’re moving fast and breaking things (to borrow from the old Facebook motto), you can pivot faster than companies optimizing quarterly earnings. Apple’s methodical perfectionism and Amazon’s operational excellence are strengths until the game changes faster than their planning cycles.
Second, we’re seeing a new kind of paradigm shift - from deterministic to probabilistic computing. Previous shifts Thompson mentions moved us from batch to continuous, from desk to pocket. But those all dealt with deterministic systems where inputs produced predictable outputs. AI represents something different: systems that are fundamentally uncertain, continuously improving yet hallucinate, that require verification rather than trust. This isn’t just a new platform; it’s a new computational philosophy that makes previous optimization strategies obsolete.
Third, the real disruption might be in business models, not just technology. AWS’s bet is that a necessary component of generative AI being productized is that models fade in importance, but what if the opposite happens? What if AI makes compute itself commoditized while model differentiation becomes everything? Apple sells premium hardware in a world where software was commoditized. AWS sells commodity compute, where software is differentiated. Both models break if AI inverts these assumptions.
Fourth, there’s a geographic dimension. Silicon Valley companies dominated the mobile and cloud eras partly because they clustered together, sharing talent and ideas. But AI development is more distributed, with strong players in London (DeepMind), Paris (Mistral), and elsewhere. The winner’s curse might hit not just companies but entire ecosystems that assume proximity still matters the way it used to.
Finally, the timeline for disruption is compressing. It took Microsoft over a decade to miss mobile. It took Meta about five years to nearly miss AI (saved by pivoting hard into open source). The next paradigm shift might give incumbents months, not years, to adapt. This acceleration means the winner’s curse isn’t a slow disease anymore - it’s a sudden cardiac event.
Thompson could be right that Google successfully navigated one paradigm shift, and is doing much better than I originally expected with this one. But that might be precisely because Google never fully won the mobile era - they stayed hungry while Apple counted iPhone profits. Sometimes the best position for the next race is second place in the current one.
The real question isn’t whether Apple and Amazon will adapt to AI - it’s whether any company can maintain dominance across multiple paradigm shifts when those shifts are accelerating. The winner’s curse might just be getting started.