{"id":79,"date":"2026-08-03T09:00:00","date_gmt":"2026-08-03T09:00:00","guid":{"rendered":"https:\/\/thenonlinear.org\/website_1ce6c7cd\/?p=79"},"modified":"2026-08-03T09:16:51","modified_gmt":"2026-08-03T09:16:51","slug":"red-queen-effect-ai-strategy-running-nowhere","status":"publish","type":"post","link":"https:\/\/thenonlinear.org\/website_1ce6c7cd\/red-queen-effect-ai-strategy-running-nowhere\/","title":{"rendered":"The Red Queen Effect: Why Your AI Strategy Is Running Faster but Going Nowhere"},"content":{"rendered":"<p>Pick any SaaS category in 2024. CRM platforms. Helpdesk tools. Analytics suites. Within a six-month window, Salesforce, HubSpot, Zendesk, Intercom, and Notion each shipped an AI copilot. Each one does the same thing: a chatbot that summarizes threads, drafts replies, and suggests next actions. The features are nearly indistinguishable. Nobody pulled ahead. Everyone spent a fortune building.<\/p>\n<p>This is the Red Queen dynamic. It is the trap that most AI strategies are falling into right now.<\/p>\n<p>In 1973, the evolutionary biologist Leigh Van Valen published a paper called &#8220;A New Evolutionary Law&#8221; in the journal <em>Evolutionary Theory<\/em>. He had spent years analysing the fossil record and found something counterintuitive. The probability that a species goes extinct has nothing to do with how long it has existed. A genus that survived fifty million years is no safer than one that survived five million.<\/p>\n<p>Van Valen&#8217;s explanation: species don&#8217;t evolve in isolation. They evolve against other species that are also <a href=\"https:\/\/rkz.otu.mybluehost.me\/website_1ce6c7cd\/co-evolution-ai-strategy\/\">evolving &mdash; a process known as co-evolution<\/a>. A predator gets faster, so prey gets faster, so predators get faster again. Each adaptation erodes the fitness of everyone else, forcing them to adapt in turn. The system as a whole keeps moving, but nobody&#8217;s relative position improves.<\/p>\n<p>Van Valen formalised this as an evolutionary zero-sum game. The effective environment of any group of organisms deteriorates at a constant rate. The climate might be stable, resources might be abundant, but the competition is improving. Your fitness is always relative to everyone else&#8217;s. When everyone improves, nobody does. Van Valen named this after a scene in Lewis Carroll&#8217;s <em>Through the Looking-Glass<\/em>, where the Red Queen tells Alice: &#8220;it takes all the running you can do to keep in the same place.&#8221;<\/p>\n<p>Replace species with companies and the metaphor snaps into focus.<\/p>\n<h2>The defensive adoption pattern<\/h2>\n<p>Most organisations adopt AI for a simple reason: somebody else did. McKinsey&#8217;s State of AI reports have tracked adoption climbing every year since 2017. By their 2024 survey, 72% of organisations reported using AI in at least one business function. That sounds like progress. But look at what those organisations are actually deploying. Summarisation tools. Chat interfaces on help pages. Meeting transcription. Code completion for engineering teams.<\/p>\n<p>These are useful. But they are also universal. When every organisation in a sector adopts the same capability from the same handful of foundation models, the capability stops being a <a href=\"https:\/\/rkz.otu.mybluehost.me\/website_1ce6c7cd\/requisite-variety-ai-organisational-diversity\/\">competitive advantage &mdash; it becomes an AI monoculture<\/a>. It becomes table stakes. The bar rises. Nobody gains ground.<\/p>\n<p>This is not how organisations describe their AI strategy in board rooms. They talk about transformation and competitive positioning. The language is offensive. The behaviour is defensive. They adopt because not adopting feels riskier than adopting. The fear isn&#8217;t missing an opportunity. It&#8217;s falling behind peers who are also running just to stay in place.<\/p>\n<p>Steve Blank, the Silicon Valley entrepreneur who helped define the lean startup movement, identified this exact pattern in the US Department of Defence. He called it &#8220;the Red Queen Problem&#8221;: institutions that are structurally incapable of moving at the pace of their adversaries, yet compelled to try because standing still means falling behind. The result is enormous spending with diminishing strategic returns. The DoD&#8217;s problem is the SaaS company&#8217;s problem is the bank&#8217;s problem. Everyone is running. Nobody is arriving.<\/p>\n<h2>The complexity tax<\/h2>\n<p>The Red Queen dynamic has a hidden cost that executives rarely account for. Each AI integration adds a layer of technical complexity. New APIs to maintain. New data pipelines to secure. New vendor relationships to manage. New failure modes to monitor.<\/p>\n<p>Consider what happens when a company bolts a large language model onto its customer support system. They need an API connection to the model provider. They need a retrieval pipeline that feeds the model relevant context from their knowledge base. They need guardrails to prevent the model from hallucinating answers that create liability. They need monitoring to catch when the model degrades. They need a team to maintain all of this.<\/p>\n<p>Klarna made headlines in 2024 when it announced its AI assistant was handling work equivalent to 700 full-time agents. A year later, the company reversed course, bringing human agents back after admitting that cost-cutting had degraded the customer experience. The AI didn&#8217;t fail. It worked as designed. The problem was that &#8220;working as designed&#8221; wasn&#8217;t enough to create advantage, because competitors deployed the same kind of system. Klarna ran fast, spent heavily, and ended up roughly where it started, with more complexity to manage.<\/p>\n<p>Now multiply by the number of AI features the company ships. Each one adds its own stack of dependencies and maintenance overhead. The organisation&#8217;s IT architecture gets heavier. Its attack surface widens. Its vendor lock-in deepens. The cost of simply keeping the lights on grows faster than the value the AI delivers.<\/p>\n<p>This is the Red Queen&#8217;s tax. You spend more energy each year just to maintain the same competitive position. The running gets harder, not easier. And the system you are maintaining becomes more fragile as the complexity compounds. More moving parts means more points of failure. When something breaks, the diagnosis is harder because the dependency chains are longer.<\/p>\n<h2>Where the escape hatch is<\/h2>\n<p>The organisations that avoid this trap understand something the rest miss. In a Red Queen race, you cannot win by running faster. Everyone is running. The model providers are commoditising the underlying technology, the talent is mobile, and the implementation playbooks are public. Running faster just means spending more to stay where you are.<\/p>\n<p>The escape is asymmetry. Finding a position where your investment produces returns that competitors cannot replicate by adopting the same tools from the same vendors.<\/p>\n<p>Proprietary data is one path. A hospital system that trains models on decades of patient outcomes has an asset that no competitor can buy from a foundation model provider. The data took decades to accumulate. It lives inside regulatory frameworks that restrict sharing. It is structurally unavailable to the market.<\/p>\n<p>Domain-specific workflows are another. A logistics company that rebuilds its routing engine around AI, rather than bolting a chatbot onto the old one, creates something structurally different from peers who added a summarisation feature. The routing engine is the business. The chatbot is decoration.<\/p>\n<p>Organisational redesign is the hardest and most durable. When a company uses AI to eliminate an entire layer of middle management rather than giving that layer a productivity tool, the cost structure changes in a way competitors cannot match by purchasing the same software. They would have to restructure their entire organisation to follow. Most won&#8217;t.<\/p>\n<p>These moves are harder, slower, and riskier than buying a Copilot license. But they produce durable advantage because they are not available to everyone simultaneously. They are the equivalent of a species finding a new ecological niche rather than running faster in the same one.<\/p>\n<h2>The uncomfortable choice<\/h2>\n<p>The Red Queen dynamic forces a question that most strategy documents avoid. Which races are you not going to run?<\/p>\n<p>Not every AI investment needs to be asymmetric. Table-stakes adoption is sometimes necessary. If every helpdesk in your industry has an AI assistant and yours doesn&#8217;t, customers notice. The point is recognising the difference between parity investments and competitive bets, and allocating accordingly.<\/p>\n<p>The organisations that will struggle most in the next five years are not the ones moving slowly. They are the ones running fast in every direction, spending heavily on universal capabilities, building complexity they cannot sustain. They will wonder why their competitive position feels unchanged despite the enormous effort.<\/p>\n<p>Van Valen&#8217;s insight from the fossil record was that running faster never changes the odds. The species that survived were not the fastest evolvers. They were the ones that found niches where the Red Queen didn&#8217;t apply, or where the running produced something the competition couldn&#8217;t copy.<\/p>\n<p>The strongest position in an arms race is often the one that finds a different game to play.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Pick any SaaS category in 2024. CRM platforms. Helpdesk tools. Analytics suites. Within a six-month window, Salesforce, HubSpot, Zendesk, Intercom, and Notion each shipped an AI copilot. Each one does the same thing: a chatbot that summarizes threads, drafts replies, and suggests next actions. The features are nearly indistinguishable. Nobody pulled ahead. Everyone spent a [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9],"tags":[34,16,43,63,26,35,44],"class_list":["post-79","post","type-post","status-publish","format-standard","hentry","category-ai-and-society","tag-ai-adoption","tag-ai-strategy","tag-co-evolution","tag-competitive-dynamics","tag-complex-adaptive-systems","tag-organisational-change","tag-red-queen-hypothesis"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Red Queen Effect: AI Strategies Run Faster but Go Nowhere<\/title>\n<meta name=\"description\" content=\"Most AI strategies fall into the Red Queen trap: heavy spending on universal capabilities that leaves competitive position unchanged. 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