The Magnificent Seven blow out
February 3 2028
The wild ride of the US tech giants has begun to falter. The “Magnificent Seven” biggest companies — Microsoft, Apple, Alphabet, Amazon, Nvidia, Meta and Tesla — have all enjoyed spectacular growth over the past five years, but now they are running out of steam. And into headwinds.
Part of the problem is their sheer size. When you are collectively almost 35% of the market index, investors get nervous, as one bad quarter can send the whole exchange reeling, with drastic domino effects. It is hard to avoid having all your eggs in one basket, when the best eggs are the entire basket.
The Magnificent Seven have also been victims of their own success, and inflated expectations. Market caps and share prices don’t reflect current reality; they’re always a measure of expectations and future earnings. As Tesla discovered, you can only grow unit volumes by 50% per year for so long; then you hit diminishing returns and market saturation. Eventually you run out of new customers.
Constant innovation is the only way to keep charging ahead, and the US tech sector has outshone Europe and Asia in this regard.
The big tech groups lead the field and have the financial muscle to invest in moonshots, putting the US in a league of its own. But innovation has its hurdles — think blockchain or metaverse. And no-one is immune to global headwinds and geopolitical shocks.
The tech surge of recent years was fuelled by artificial intelligence (AI), and the hopes for exponential returns in terms of productivity, performance and innovative spin-offs that AI would deliver or enable. Which it has, to be fair.
But AI has also disappointed, and so-called general AI or human-level intelligence seems a long way off, and may also be fraught with all sorts of issues. The AI boom has run its course.
As the Magnificent Seven stumble, we are left wondering: what will be the next big thing, and who will take the lead? /First published on Mindbullets February 1
YOU CAN’T ALWAYS RELY ON AI
June 2 2024
Over’ the past few years, we ve been blown away by the exponential improvements in computing in general, and in AI in particular. From beating all opponents in the game of Go to driving autonomous cars and diagnosing cancer, it seemed that AI could outperform human players, drivers and doctors at every turn.
Until it couldn’t. Government leaders and policy experts were relying on AI to help them navigate through one pandemic, natural disaster and social crisis after another, to no avail.
Despite employing the biggest supercomputers and most sophisticated data sets and complex models, scientists were unable to find speedy solutions to coronavirus outbreaks, climate disasters or global economic shocks.
“These things are all complex, chaotic, connected systems,” says Ferrus Homm, a leading data scientist and cognitive systems advocate.
“Whenever you put human behaviour into the mix, things become unpredictable!” That’s part of the problem; the instantaneous feedback loops that now exist in the global digital society help us to maximise our personal utility.
But when everyone tries to rationally optimise their health, wealth and individual happiness, the knock-on effects can be considerable at scale. On a macro level, all those butterfly wings are causing chaos. Never mind the irrational acts!
There’s light on the horizon. With more and more knowledge, slowly we can improve our understanding of how the world really works.
And with more and more exposure to bad actors, we can improve how we operate and interact as social animals.
Smart systems and data can help, but ultimately it takes human ingenuity to solve very human problems. Don’t rely only on AI.