How are we not staring down an inbound tech purge this decade? Is any of this stuff freeing us? No. Better question, is any of it making things cheaper? Well it seems composability is all the rage and ostensibly it should, and using Uber as a microcosmic example, they :
- have a piece of core code
- get the location information of a driver through Google Maps
- send the information to the driver through Tulio
- pay the driver through Stripe.
Awesome. But Uber and rideshare are more expensive than taxis were. The difference is rideshare companies never figured out how to make money. I might say the same of streaming, which is just as expensive and confusing as cable was. To watch everything you want (sports, shows, etc), there's a dozen different streaming services, each with several different plans, some with multiple different apps even. They should consolidate them all and recreate…cable. Or the cloud, which is becoming expensive, and getting hit with exploits, where several businesses are repatriating their IT workloads from the public cloud to save money. Or what about Cybertruck? Or other nonsense like a Reddit IPO? Or Youtube and its pre-upload scans tied to ever-expanding licensing databases, and scans that flag any prevailing censorship flavors of the week, plus the advertiser demands, unfair algos, threats of demonetization, de-platforming...there's a threshold where this becomes suffocating to art and expression. None of this centralized stuff can stop its own momentum. Centralized companies can’t build L1s. It all leads into this thought I have on Ai.
I keep hearing in the news, social media, and in markets that Ai is going to allow businesses to cut costs, cut employees, consolidate, and ultimately make businesses more profitable.
NO IT WON’T
For a small subset of businesses Ai is fantastic for the bottom line. But if every business has the Ai models, Nvidia architecture, hyperscalers, etc, then eventually what happens? Everyone has lower costs. But then someone cuts prices. So now everyone has the lower costs AND the lower prices. The margins collapse. It benefits the consumer. Ai I’m absolutely convinced will supercharge FOSS, which is terrible for Silicon Valley, as it distributes away centers. I’m not saying Linux distros will come for the OS crown or Chrome won’t maintain it’s browser hegemony. But when you have mesh networks challenging ISPs and an open source Adobe Suite option that’s interoperable with everything else, the traditional ecosystems have barbarians at their gates.
We've seen it in various ways. My favorite example is the early 90s when this played out with computing and software. Every business followed the promise of lower costs and consolidation. They rushed to integrate. Everyone was proudly rocking them. And how soon computing hardware and software was abstracting away so much, that many businesses went bust. Then the internet…for 20 years it had been metastasizing, going from slowly to suddenly. Information technology turned into this brutal deflationary system, where whole data sets, universities, libraries, etc, got crammed into ever shrinking hard-drives, executed by ever shrinking silicon, and complex software. Cables, wires, and waves allowed this creation of information overabundance to scale to light speed, settling instantly, at near zero cost – or whatever it cost to send an email.
It savaged the a priori business models, infrastructure, and traditional thinking that existed before it. Smart people looked dumb. We know the story. In the United States fortunes were born from this crucible. Look at the top-10 rich list of today in America.
Something similar is slowly happening today. Ai is coming, eating information, bitcoin is metastasizing, absorbing value at the protocol layer instead of the application layer. Meanwhile FOSS is sitting there ready to tear down borders and distribute away centers with its new buddies. Together they can dismantle the current system, the same way the current system did the analog system before it. The parallels are undeniable. That famous meme of the bitcoin asteroid coming for financial dinosaurs should get updated to show a whole many different kinds of dinosaurs. We’ll get a brutal deflationary system, creating an overabundance of what this time?