To The Moon

Is artificial intelligence a disruptive innovation or a sustaining innovation?

If you can answer that question with certainty, there’s a pot of gold at the end of the AI rainbow.

I’ve placed my money on artificial intelligence being largely a sustaining innovation, and I think $Alphabet(GOOG)$ $Alphabet(GOOGL)$ is the best investment among the big tech stocks today. That opinion is partly based on the company’s positioning, but it’s also the value of the stock. While most AI companies trade at nosebleed multiples, Alphabet is going for 19.4 times earnings.

What interests me today is the fact that Alphabet, via Gemini and DeepMind, seems to be getting its mojo back!

Innovation Definitions

Clayton Christensen introduced the idea of disruptive innovations and sustaining innovations in The Innovator’s Dilemma. According to Gemini, here’s how they are defined.

Disruptive Innovation:

Based on the work of Clayton Christensen, a disruptive innovation is a process by which a product or service initially takes root in simple applications at the bottom of a market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing established competitors.

Gemini

Sustaining Innovation:

Based on the work of Clayton Christensen, a sustaining innovation is an improvement to an existing product or service that allows companies to sell better-performing products for higher profits to their best (most demanding) customers.

Gemini

One of the ways I like to think about disruption is as a competing product that the incumbent can’t respond to for structural reasons.

So, is Alphabet facing a disruptive innovation from AI that will break the company? Or is AI a sustaining innovation that will make Alphabet stronger?

Right now, I think we’re leaning toward the latter.

Gemini’s Comeback

Gemini is Google’s response to the ChatGPT app. If you haven’t downloaded it, it’s worth trying because it’s in many ways superior to ChatGPT. And people are starting to notice. I thought this take summed it up:

Between October 2024 and March 2025, Gemini increased daily active users from 9 million to 35 million, and the number of monthly active users stood at 350 million.

For whom haven't open CBA can know more from below:

🏦 Open a CBA today and enjoy privileges of up to SGD 20,000 in trading limit with 0 commission. Trade SG, HK, US stocks as well as ETFs unlimitedly!

Find out more here：

• Trade on a Cash Boost Account and enjoy up to 6 months of Commission-Free trading.

• 💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉

• 💰CBA Mini Course 1: What is Cash Boost Account(CBA)?