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I think this is wrong. At the end of the day, successful companies are likely among the most effective ways to organize humans beyond Dunbar's number, it is just that employee alignment is a hard problem.
If software companies as large as Google which are 10x as productive as Google could exist, they would eat Google's lunch. But humans are not ants, and most of the productivity in a company will not be spent on increasing shareholder value but on furthering the individual interests of agents.
There is this neat little thing called capitalism, where a lot of companies are competing for efficiency. Innovations which improve the efficiency of production chains happen all the time without the entire production chain having to change. Stuff like "ok, we will still use drills to make holes in rock to dynamite it, only we will use steam drills instead of manual drills." If a role can be reasonably replaced by AI (and even if it can not), some company is going to replace that role by AI. If this increases their fitness, that will eventually become the industry norm.
Google is only as big and as weird as they are because they have The Money Fountain of search, which they enjoy because they really were very efficient over 20 years ago and their rivals were busy shooting themselves in the foot. But now it's their turn to be the lumbering incompetent titan.
Google can smash a company 10x more efficient by deploying 100x more resources and exploiting their gigantic reach. Or buying the startup that might threaten them, bribing other companies to use Google search by default. If Google had to compete like a normal company, they'd be laughed out of the room.
Take the field of AI. Deepseek is a tiny company with maybe 1% of the compute resources Google has. They're dealing with sanctions too. But per artificial analysis, Deepseek's best AI is slightly better and much cheaper than Google's best AI: https://artificialanalysis.ai/agents/coding-agents
Google search is an AI product, AI is their core business. Google have spent hundreds of billions on AI research, they invented the transformer architecture but have little to show for it.
Well I was pushing for this at work and got us maybe from 0% to 3% of the potential value of the technology.
They have one thing: A search engine that they've intentionally enshittified so much that quite a few people will just ask eg. ChatGPT because Google results these days are so unbelievably bad that it's less effort to verify potential AI hallucinations than try to find the actually useful search result in the googlestack.
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