I think it's clear by now all companies, world governments, and so on are starting to see exceptional efficiency boosts by using AI. It's clear as day in logistics, marketing, legal, accounting, and so on. Many estimates see AI contributing to a doubling of global GDP by the 2030s. Sectors like manufacturing, services, healthcare have a huge potential upside from efficiency gains.
I'm not looking to argue those points as I believe they are self-evident, and also supported by plenty of evidence from reports by major banks, governments, companies and so on. Yes there are some contrarian views that AI won't improve from here and so on, but I'd like to ignore those for now.
My question is, what sector will improve more? Small caps or large caps? Here are the major arguments:
- Large caps — Winner takes all like is currently seen in tech.
- Small caps — Much more easily compete with large firms (eg. app start up in 1 day, using AI agents as sales team, and so on).
Of course it's not a false dilemma, and it's possible both sectors grow or fall. But if one fish is bigger and gobbles up the other, would it be the rise of small caps (now small companies have the power of larger ones) or the large caps (winner takes all, smaller can't compete).
Thoughts?
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