Two men currently dominate American technology, Elon Musk and Sam Altman.
They’re going down.
Musk took his eye off the ball at Tesla years ago. He let Chinese competitors pass him by and did nothing. BYD now dominates in batteries, which means it dominates in Electric Vehicles. Tesla hasn’t refreshed its lineup in years.
Altman misread AI. He drank his own Kool-Aid, believing that ChatGPT’s Generative AI capabilities meant Artificial General Intelligence was just around the corner. It wasn’t. It’s not.
When AGI comes, it won’t come from one giant company with one giant supercomputer cluster. It will come from a million different directions. Some will come from the Cloud Czars, some from the Cloud Emperors. A lot of it will come from start-ups. More of it will come from universities. Trump’s Musk-inspired cuts to university funding mean that’s as likely to mean Tsinghua as Stanford.
Simply put, the top-down approach to AGI won’t work. There’s a lot we still don’t know about how human thought occurs. We’ve just modeled the brain of the fruit fly and think we’re very clever. It makes us fruit flies.
Fortunes Built on Sand
Seven of the world’s 10 biggest fortunes, including Musk’s reported $335 billion, are built on the sand of market cap. So is OpenAI.
If the last few weeks have taught us anything, it’s that tech market cap can disappear as fast as it appears. Unlike fortunes from oil or manufacturing, it’s mainly built on assumptions about software, and when those assumptions change money can flow out at Internet speed.
The Cloud Czars have turned their cash into infrastructure. Both Elon and Sam are trying to do the same, building supercomputer clusters in Texas. But without leading edge software, all they will have to sell are low, low computing prices. Without their own commerce to back up their plays, things like Amazon’s store, Google’s phones or Microsoft’s software, price becomes a race to the bottom unless there’s enormous demand for AI services, delivering enormous productivity gains.
That’s not happening. Musk’s Grok is crap. Altman’s ChatGPT 4.5 is crap. Large Language Models have hit a wall, and the only way through the wall is innovation. Musk and Altman have both driven innovators away from them, Altman directly and Musk by seeking political power.
Musk’s cars aren’t selling, and his rockets are blowing up. Altman’s partners, Masayoshi Son and Larry Ellison, both expect him to deliver something he doesn’t have.
This is not going to end well.
