The Great Game is sucking up all the investment oxygen in the global economy.
AI is supposed to result in “Super Intelligence” Real Soon Now. That means a cloud computer is going to be able to do your job, do any job, do all the jobs, better than any knowledge worker.
Which means we won’t need knowledge workers. Everybody becomes slaves to the Great Computer and a few billionaires become trillionaires.
Mark Zuckerberg seems terribly excited about this. He has followed up huge capex spending by trying to drain the AI talent pool, making every nerd that can train a database think they’re LeBron James. The headline is buying ScaleAI for $14.3 billion, mainly for the CEO and his team. But he’s Scott Boras-ing individual talents as well, offering enormous salaries and other perks.
He’s not alone. Elon Musk is putting Tesla’s money where xAI’s mouth is, billions of dollars going into Larry Ellison’s pocket at Oracle. Microsoft and Google are tossing out thousands of talented people to hire a handful of AI programmers, squeezing their customer bases to afford ginormous capex as well.
What’s Apple Up To?
The question I keep asking myself is, “what is Apple up to?”
Apple announces earnings tomorrow and they remain the biggest of the Cloud Czars by revenue, bringing nearly one-quarter of $400 billion to the bottom line every year.
But Apple hasn’t joined the AI rush. They expect “Apple Intelligence” to fit inside Apple hardware. They don’t want to run it in the clouds. That means their capital budget is puny next to its rivals. You also don’t see any AI All-Star team driving up to the spaceship at One Apple Way. When usable AI arrives, whoever delivers it, Tim Cook figures he will be its gatekeeper. AI has got to run somewhere, it has to interface somewhere, and Apple is all about interfaces.
This has led to the stock going nowhere for a year now, while those who have been spending big are seeing their stock up anywhere from 15-50%. The street is betting that Apple is wrong, that when AI comes Apple will be bypassed. Maybe that some other as-yet unknown thingamabob will become the interface to the future.
I don’t know. But betting against Apple on interfaces has always proven wrong in the past. And if Apple is right a lot of Big Tech AI money is going down the drain.
