"When Jeff Bezos started Amazon, Barnes & Noble wasn't pouring billions into machine learning or cloud infrastructure. This doesn't mean that it was easy for these entrepreneurs to change the face of whole industries. It was not. But it was at least possible. Back then, giants could be out-innovated because they were bureaucratic, cautious, and often blind to the potential of what the upstart start-ups were building."
"The situation is very different today. The startup landscape has changed radically. Where once it was populated by bootstrapping innovators who hoped to build giants from tiny seeds, today many of the most promising opportunities are gobbled up by firms that can deploy billions of dollars in resources long before they start making revenue. Often, these companies are funded by giants themselves, whether that's the enormous PE and VC firms that dominate the Silicon Valley landscape"
Startup disruption was once feasible because incumbents were bureaucratic, cautious, and often blind to upstarts' potential, allowing entrepreneurs to out-innovate large firms. The landscape has shifted: promising opportunities are rapidly captured by firms with billions of deployable resources, and many startups receive funding from private equity, venture capital, and hyperscalers. Major tech companies directly invest in leading AI ventures: Microsoft holds roughly 27% of OpenAI after investing about $13.8 billion; Amazon invested $8 billion in Anthropic and supported it with infrastructure; Alphabet invested around $3 billion in Anthropic. Five major US tech firms invested $227 billion in R&D in 2024, exceeding the US government's non-defense R&D budget.
Read at Fast Company
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