AI is going to kill the Tech Industry

It’s a story old as time. A new technology hits the world, people want to be part of the new revolution and be the best with the new shiny object.

Eventually there are too many companies supplying the product and demand focuses on a handful of companies leading to a large fallout in companies values.

Railroad boom and western expansion

First Auto boom

Tech bubble in 2000s

Crypto

And now it’s in the name of AI.

The power and potential of AI is as beautiful as it is terrifying. Just look at some of these use cases:

Build tailored “Apps” on Chat GPT

Bill Gates on development of “Agents”:

In the next five years, this will change completely. You won’t have to use different apps for different tasks. You’ll simply tell your device, in everyday language, what you want to do. And depending on how much information you choose to share with it, the software will be able to respond personally because it will have a rich understanding of your life.

While not fully developed yet, as the technology evolves it has the promise to be able to develop whatever you want and connect to whatever you have. If you’re a shareholder of many tech companies this should scare the shit out of you as sea changes lead to the potential for higher churn.

That company you own because there are millions of subscribers that has tailored versions of its product for many industries is about to look pretty antiquated. Have the AI study all the notes in your business and make a tailored CRM with all the best practices for efficient data entry and connect it with my Email.

Ohh remake my email to be more simple and add tools to make me better at sales. Having difficulty making that tool? No problem go to the AI App Store and subscribe to the best email add-in for sales.

As technology has evolved we have seen basically winner take most markets. Do you really want the 4th ranked GPS on your phone? How about the 3rd best Language Model?

Many companies are creating and launching Language Models right now but as they expand I would assume only a few true leaders will emerge. Will niches develop? Maybe, but remember you can also just upload data to the mainstream ones to give it expertise in what you want quick and efficient knowledge on.

I’d be worried about any tech companies that are “features of AI” not “platforms of AI tools.” A feature would be “we have the best mousetrap” a platform is “we have the best tools to create your mousetrap” and/or “choose from the highest reviewed mousetraps on our AI store”

Even if you disagree with me on the future of tech, we probably agree that the ability to produce new features and products is now extremely fast for large companies and basic tech start ups given output of these models. This means that the supply of code should increase over time which means more tech companies and competition. This is not good for growth and pricing as more hands try to grab their piece of the admittedly growing market pie.

The AI platforms leaders as I see it are: OpenAI, MSFT, GOOGL, AMZN, ADBE

Potential Platforms:
Salesforce (CRM) with their EinsteinAI application and App Store

IBM with their AI tools through Watson

Probably some others

Other comments:

AI is likely to automate many jobs away and replace some of those jobs with jobs we can’t imagine yet. If true legacy companies that price on a per seat basis will be challenged if they don’t pivot to per usage basis. A classic innovators dilemma.