History Doesn't Repeat but sometimes it Rhymes
This quote from Mark Twain should be regularly displayed in offices and meeting rooms (back when they were a thing—perhaps now it should be on everyone's home phone screen?).
The birth of internet advertising, the dot-com crash, the financial crisis, the RTB/programmatic revolution, the smartphone, wireless broadband, 5G, the social media explosion, the COVID crash, the CTV boom, and the pivot to the privacy web—these are some of the main trends that have shaped where we are today. There are many recurring patterns here: economic cycles, hype cycles, emerging companies. There are also macro trends that run through all of it, notably the continuous rise of the big five tech companies (NVIDIA is a bit different).
Consider OpenAI. The previous booms enriched the giants of their time but also gave us one or two new players. The search boom gave us Google, social media gave us Facebook/Meta, and AI software is giving us at least one new giant that appears to be OpenAI—more may follow.
These revolutions have also changed how we work. The internet brought us email; smartphones brought us always-on connectivity. COVID and video conferencing triggered the work-from-home revolution. Now, what will AI do for work?
Yet, there are also significant differences—new trends that have not been seen before. NVIDIA is a recent example no one saw coming, driven by their ownership of not just the hardware but, more importantly, the programming language for parallel processing, vital for graphics and now vital for AI. NVIDIA demonstrates a different dynamic that can spark a new shift, more akin to Apple than anything else, but still unique. This time, the established players have invested hugely ahead of the curve in AI. So while we might see some giants lose market share, their ability to be replaced by new entrants may be less than before. Time will tell. Eighteen months ago, Meta was being touted as the giant that might fall; now, the focus is on X. Yet even if X falls, the "Elonosphere" looks well-positioned, with SpaceX and Starlink having strong control of satellite communications, Tesla advancing in robotics, and significant investments in AI.
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Another major trend has been the simultaneous concentration of tech power and the democratization of its usage. This trend has intensified, especially when considering the expenditure on AI by the big five plus OpenAI. Yet we are also seeing the expanded usage of advanced technology by so many people in a way we've never seen before, at anything close to this scale.
AI hype is incredibly high right now. If history rhymes, we will have a significant correction before a huge wave of value creation. Will this trend hold? I am confident it will, and I think the trend is evident. However, the details of how it will unfold are going to be wild.
The trends are there for all to see. But to navigate the changes, we need to be aware of how this run may be different. We need to remain flexible.
We live in interesting times.
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6moOne of my favourite quotes. One thing that did jump out is that it will be interesting to see how the likes of AST do in the face of the likes of Starlink, HAPSMobile and Kuiper. It’s still very early days yet but their mobile network offering is designed to work with existing mobile devices although I believe they’re still using SpaceX to launch their satellites so the damage to the Elonsphere is limited! However it pans out, they’re a good example of a company learning from the rhymes of the past and trying to remain flexible in terms of their present-day offering