The race among AI platforms for domination reminds me of the old cliche about “picks and shovels.” In the California Gold Rush of 1849, the only people who made real money were the folks selling picks and shovels to the wide-eyed masses heading to the hills to mine for gold.
The occasional miner found gold, sure. But the vast majority of folks found nothing or, at least, nothing that justified the sacrifice of time, money, and energy in looking for gold. Which brings me to the current state of things in AI. The only people making real money in AI are those selling the tools (picks and shovels) to support AI platforms. These include:
NVIDIA, and the other chip makers in trailing behind it
Energy producers
Construction companies
And, if the hype is to be believed, space companies
And on and on. And, that’s not likely to change. Why? Science fiction fans and technophiles believe in “The Singularity”—a moment where the promise of agentic AI is reached rendering all other AI platforms obsolete. But the truth is that any superiority achieved by an AI platform is quickly matched or surpassed by competitors. By reputation, Anthropic is the best. OK, but ChatGPT, Gemini, and others are still really, really good. And while Anthropic may receive a premium at it’s IPO for its reputation, any advantages it achieves in the market will be temporary.
This, in turn, will create tremendous pricing pressure across these mega platforms, perhaps to the point where AI—like search, browsers, and many other tech staples before it—becomes cheap or even free to use. The money to be made in AI (beyond picks and shovels) will be in customized integrations and implementations that are difficult to replicate—not in producing an AI-enabled “Ask Jeeves” platform.